Posted by: the3rdi | June 8, 2010

Small business owners say their retirement prospects are improving

Small business owners say their retirement prospects are improving in line with the economic outlook – but still believe that a full recovery is at least a year away.

The latest quarterly survey of more than 1,000 UK businesses, carried out by Clifton Asset Management (CAM), also reveals that a cut in corporation tax is the top priority for SMEs.

According to the latest research from CAM, which provides financial and strategic advice to SMEs, 68 per cent of business owners say their retirement is further away now than it was a year ago. This compares to a figure of 77 per cent earlier this year, and 80 per cent six months ago.

The main reasons given for delaying retirement are tougher trading and market conditions (55 per cent) and declining property and pension values

(23 per cent).

However exactly two-thirds of those surveyed said they believed that a full return to growth and easy access to finance from the banks was still at least 12 months away. Only 7 per cent of business owners said the recovery was already underway.

Likewise the rate of job cuts among SMEs has not fallen significantly since the last survey. Some 26 per cent said they had been forced to reduce their payroll in the last six months, while 14 per cent said they would need to do so in the next half-year. Both figures represent a fall of just 1 per cent on last time.

When asked what single thing the new Government could do to help owner-managed businesses across the country, 40 per cent called for a reduction in corporation tax on the first £100,000 of profit. Other popular measures included a reduction in “red tape” affecting businesses (17 per cent), and an extension of the VAT and PAYE “holiday” and more tax relief on capital expenditure (both 13 per cent).

The latest CAM survey also found stark differences across the country when it came to general confidence among small business owners.

London (75 per cent) and the South East (63 per cent) remain the optimistic regions in terms of business owners’ views of their area being better placed for economic recovery than the UK as a whole, with Wales and the West Midlands the most pessimistic, both at 17per cent.

Anthony Carty, director at Clifton Asset Management, said: “This is the second consecutive survey in which we have seen an increase in the number of business owners who see their retirement prospects brightening, and this is no doubt in part a reflection of the fact that the economy is emerging slowly from recession.

“However the uncertain political situation coupled with the fact that we are about to enter a period of financial austerity, give no cause for complacency. This is borne out by the fact that most business owners believe that we remain a long way from any kind of proper recovery.

“Likewise a paltry 6 per cent of people in our survey have succeeded in accessing finance through the Government’s Enterprise Finance Guarantee, while almost 60 per cent have seen no improvement in the overall position in regard to bank lending, so we still have a long way to go.

“And while the situation at Westminster dictates that the politicians will have to be flexible when it comes to many policy positions, our survey sends out a clear message that lower taxes and reduced legislation are the best way to help the business sector which, above all, will drive the UK’s recovery.”


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