Small company owners delay retirement plans

More than a third of SME owners aged over 65 still do not know when they will retire and half report that they have changed their retirement and succession plans as a result of the economic downturn.

A survey from The Open University shows that 42 per cent of owners are expecting to carry on running their businesses for longer, delaying their retirement, while seven per cent expect to close or sell their business sooner. More than half of those which expect to close early report that their turnover was down over the past year. Despite the financial crisis, almost half of owners are still confident they will be able to retire by the age of 65, but 18 per cent expect to retire between the ages of 66 and 70 and one in ten believe they will be running their business beyond their 70th birthday.

Pensions

Pensions have been highlighted as a concern, with 28 per cent of SME owners expecting to struggle in retirement. This proportion increases to 35 per cent for the smallest businesses.

When asked what their plans would be should they be unable to work due to illness or injury, 48 per cent of business owners who work alone said that a lack of continuity arrangements would mean they would have to close their business. More than half of the SME owners surveyed admitted they had no insurance protection against illness or injury that would make them unable to work.

Professor Rebecca Taylor, Dean of The Open University Business School said: "The economic downturn has created a number of serious challenges for Britain's SME owners. Our latest survey findings suggest that many owners, particularly those with smaller businesses, are having to make significant changes as they plan for retirement and succession. While some owners may never have intended to give up the business, many now expect to work for much longer than they had envisaged."