The economic downturn is hitting the retirement plans of many company directors in the West Midlands, it was claimed this week.

Research by Clifton Asset Management has shown that owner-managers feel they have been “abandoned” by Government and banks as falling pension and property values leave many reliant on their business as a financial cushion.

The firm went on to claim that most owners of small businesses in the region are putting off their retirement as a result.

The majority also see retirement as being a decade or more away – with 23 per cent not intending to retire at all. Clifton Asset Management, which claims to be the country’s “leading alternative to banks” for owner-managed businesses’ finance and strategic planning, questioned nearly 100 business owners across the region about their retirement plans.

The study found that they feel increasingly pessimistic about the effect of the general economic situation on their exit plans. They are also scathing about what they see as the Government’s failure to appreciate the crucial role of small and medium-sized enterprises, and about the effect of its pensions policy on their financial position in retirement.

Neil Greenaway, managing director at Clifton Asset Management, said the research clearly indicated “troubling times” and that that SME owners in the West Midlands felt “abandoned” by both the Government and the banks. One unnamed owner-manager who took part in the survey is quoted as saying: “No one in government has held down a proper job before so they have no idea about how small businesses operate or about the pressure to sustain growth and momentum in normal times, let alone in harsh economic times.”

Key findings of the survey include:
* More than half (59 per cent) of West Midland business owners feel they are further away from retirement now than they were a year ago while 64 per cent feel retirement is at least 10 years away;
* The worst-affected sectors include building and construction, carpenters and plumbers, estate agents, architects and engineers; less severely affected are manufacturing, retail, hotels and leisure, transport and agriculture;
* Just under half (46 per cent) of business owners plan to retire between the age of 55 and 65, while 23 per cent do not plan to retire at all. The amount planning to retire between the ages of 70 and 75 was six per cent – almost double the national figure of 3.6 per cent;
* More than a third (37 per cent) say they either will, or may, start another business when they exit their current one;
* Only one per cent feel that Government recognises the crucial role of owner-managed businesses to the economy compared with a national figure of 4.5 per cent, with just two per cent believing that Gordon Brown has been good for their pension plans.

Meanwhile, when it came to the importance of a number various factors on their retirement plans, the financial health of their business was cited by 58 per cent as the principal influence.

The development of their own exit strategy was viewed by respondents as the least significant factor, being seen as crucial by only 38 per cent.

“After having been let down by traditional pensions over the last 20 years, many business owners chose to invest in buy-to-let properties to build assets for their retirement,” said Mr Greenaway. “Now, as that market deteriorates, these same owners must look to the value in their businesses to provide a financial cushion, while staring a possible recession in the face.’’

“We all dream of putting our feet up and feeling the sand between our toes – but the reality is that many of the UK’s business owners feel further away from realising those dreams today than they were last year.”