Most small business owners in the West Midlands see their retirement prospects receding as the economic gloom deepens, according to a new survey.
The economic downturn has hit Birmingham and the West Midlands harder than most areas, with some of the highest unemployment figures in the country reported following a spate of job cuts in the region’s automotive sector and manufacturing base.
Well over half of West Midlands SME owners are pessimistic about the region’s prospects, making it the most pessimistic region in England with the North East.
These are among the findings of a survey of 200 bosses carried out for the Birmingham Post by Clifton Asset Management (CAM).
Neil Greenaway, managing director at CAM, said there had been a 17 per cent increase on the previous survey in the numbers of SME owners who felt their retirement was further away now than a year ago.
He said: “In our last quarterly survey, 65 per cent of those questioned said their retirement had been put on hold, and this was an increase on the previous 59 per cent. The fact we have seen a second consecutive increase, to 82 per cent, provides compelling proof of the severity of the situation we find ourselves in, and of the direct impact on people’s retirement plans.
“We’ve also seen a decrease in respondents who plan to retire between 55 and 65, down to 46 from 58 per cent. A full 32 per cent of respondents say they do not plan to retire at all, up from 13.”
Dennis Wilkes, managing director of Kings Norton Engineering in Birmingham, said his company pension scheme had suffered badly.
“I would have to work until I was 70 if i were to receive what I would have gotten at 65 in pension,” he said. “Of the workforce I am the oldest but go to the average age of people and they are in their 50s. I hope things for them will get better – the company pension scheme has been blown out of the water.” When those surveyed were asked if they felt the West Midlands was in a better position than the UK as a whole, 59 per cent said “no.”
SME owners were also scathing about the government’s attempts to get banks to restore lending and credit facilities.
Mr Greenaway added: “We have heard a lot from the government about the amount of pressure it is putting on the banks to start lending again. However, our survey proves this has yet to benefit those at the ‘sharp end,’ with only seven per cent of businesses reporting any noticeable improvement, in terms of their bank manager being willing even to discuss existing or new credit lines.” Lord Mandelson’s appointment as secretary of state for business does seem to have had a significant positive effect, with 31 per cent now believing the government does recognise the crucial role of owner-managed businesses for the economy – a figure which stood at just six per cent last time.
“Of course it is encouraging 78 per cent of those who took part say they expect to maintain staff numbers at their current level over six months, although with the UK now having gone into recession, one wonders how long this optimism will last.”
The Clifton Asset Management research found 44 per cent of West Midlands companies say they have been affected by the pound’s dramatic fall against the euro in recent months, while well over half (62 per cent) of small business owners say it is not viable for them to pay into a company pension scheme.
“The key findings of our latest survey for the West Midlands tell their own story, particularly in regard to people’s retirement and pension plans, and the absence of any sign of a thaw in the freeze on bank lending,” concluded Mr Greenaway.