Business owners fail to update retirement plans

Nearly three-quarters of owners of small and medium sized businesses in Northern Ireland have failed to revise their retirement plans – despite dramatic declines in the value of many pensions, according to a survey from business advisers Grant Thornton.

Some 72% of respondents to the firm’s quarterly Business Barometer survey admitted they had taken no action even though circumstances had vastly changed.

Trevor Blayney, Managing Partner of Grant Thornton, said: “The figure is surprising in view of the recent experience of the pensions industry. With so much of Northern Ireland’s wealth concentrated in the family business there is a real concern that failure to plan for retirement in good time may adversely affect the future of local companies and consequently limit the aspirations of their owners.”

The survey showed that of the minority who had updated their plans most had done so because of stock market turmoil and the drop in retirement annuity values.

Grant Thornton also said it was worrying that almost one-third of business owners had yet to devise an exit strategy from their business which, in most cases, is the only source of wealth outside the family home.

When pressed as to whether they were prepared to sell the family business to fund their retirement, owners were almost equally divided (45% replied 'yes', 44% replied 'no' and 11% replied 'don’t know').

Despite recent debate about raising the retirement age to 70, most business owners intended to retire before 65, with 62 being the average target.

Grant Thornton’s survey, conducted in January, questioned companies which employ a total of 8,080 people in Northern Ireland and have a combined turnover of £564 million.

The survey showed a recovery in confidence about the economy compared to the September survey which was conducted during the crisis that led to the suspension of devolution. But business owners believe prospects are uncertain, with 69% of them unsure of the direction of the economy – the highest level since the survey began in November 1998.

(MB)