Business owners unable to save for pensions

| October 3, 2012
Business owners unable to save for pensions

Nearly half of business owners have no private pension savings, according to research by the Prudential.

The insurer found that 46 per cent of one-person businesses have no private pension, representing 1.3 million people.

Fifty-four per cent of this group said they were unable to afford to set money aside for a private pension, 18 per cent said they did not intend to retire, and 9 per cent said they had already saved in a company pension scheme from previous employment.

Twenty-nine per cent of business owners, or 792,000 people, will rely solely on the state pension when they retire.

This is substantially more than the 16 per cent of people in the UK across all employment types who are retiring this year with only their state pension to live on.

Other self-employed workers will fall back on other savings and investments, equity from their properties or funds from the sale of their business.

A quarter said they would use their partners’ pensions to supplement their income.

Sixty-three per cent of the business owners without a private pension said they had no plans to start one in the future.

Stan Russell, retirement expert at Prudential, said: “Pensions offer huge tax advantages and business owners who have not made any retirement provision should seek advice from a financial adviser without delay about the best way to save for their futures.”

A new report published by the United Nations Population Fund (UNFPA) and HelpAge International highlights the global challenges faced as the world population ages.

By 2050 there will be more people over the age of 50 in the world than children under the age of 15, the report says.

In 10 years, there will be one billion older people in the world, 200 million more than there are now.

The UNFPA is calling to new approaches to health care, retirement, living arrangements and intergenerational relations.

Speaking at the report’s launch in Tokyo, UNFPA Executive Director, Dr. Babatunde Osotimehin, said: “People everywhere must age with dignity and security, enjoying life through the full realization of all human rights and fundamental freedoms.”

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