Economic downturn hits retirement prospects in the sector, according to Clifton Asset Management survey

Retirement is becoming a distant dream for many in the construction sector as the prospect of recession looms.

With house building having all but ground to a halt in recent months, the owners of construction businesses now say the worsening economic climate is having an impact on their retirement plans.

These are among the findings of a nationwide survey carried out by Clifton Asset Management (CAM), the UK’s leading alternative to banks for owner-managed businesses’ finance and strategic planning.

CAM questioned more than 1,000 business owners, across all sectors, about their retirement plans.

And while those who say they are feeling downbeat about their immediate prospects are still in a minority, a quarter admit they will be forced to cut jobs in the next six months.

They are also increasingly critical about what they see as the Government’s failure to appreciate the crucial role of SMEs, and about the effect of its pensions policy on their financial position in retirement.

Anthony Carty, director at CAM, said that 65 per cent of the business owners questioned felt that their retirement was now further away than it was a year ago, with restaurants, retail and wholesale among the worst affected.

“This compares with a figure of 56 per cent in our last survey just three months ago, so clearly the economic downturn is already having an impact on people’s retirement plans,” he commented.

“In recent years construction has seen phenomenal growth but now however, the credit crunch means people are finding it almost impossible to get a mortgage with the result that no-one is buying and selling property. Meanwhile, commercial projects are increasingly being shelved, delivering a double blow to the construction industry.

“Clearly, the prospect of a full recession, ongoing stock market turmoil and the bail-out of the banks will do nothing to calm the fears of construction bosses when they come to weigh up their retirement options in the coming months. “

The Clifton Asset Management research also found that while across all sectors, 71 per cent of owner-managers said they were generally optimistic about the prospects for their business and only 13 per cent were definitely pessimistic, almost a quarter (24 per cent) said they would have to reduce their payroll in the next six months.

Other key findings in the survey include:

just under half of business owners plan to retire between the age of 55 and 65, while 20 per cent do not plan to retire at all
just 8 per cent feel that Government recognises the crucial role of owner-managed businesses to the economy, with the same figure believing that Gordon Brown has been “good” for their pension plans
some 37 per cent of business owners have bought their current business premises with their pension provision in mind


Anthony Carty added that the survey showed many SME owners were still enjoying the effects of having run a business in more benevolent times.

He concluded: “It appears that businesses are yet to feel the full shock of what is happening out there, and perhaps there is an element of still being able to benefit from the kinder trading conditions of last year.

“This comfort zone will disappear as we move into 2009 and it is striking that a quarter of businesses are already planning job cuts.

“We are in for a very tough six-nine months, and this is backed up by the feedback we are receiving from businesses across the country every single day. In the light of all this it is hardly surprising that business owners feel their retirement is moving further away.”

Email: neil@sturgessvandamme.co.uk