There appears to be a certain complacency amongst the self-employed when it comes to their own personal pension provision.
According to a recent study by the Prudential,* 46% of the UK business owners surveyed have no pension savings to support them in retirement.
Whilst some of the reasons quoted for this apparent lack of forethought are perhaps understandable in a recession, such as a preference to invest money into their companies, one of the reasons given is that they believe they are unlikely to ever quit work!
Brunsdon Financial Services CEO Brian Morman said, “I don’t know whether the majority think they will have to continue working out of necessity or whether it’s a lifestyle decision. But whatever the reason, making no pension provision whatsoever demonstrates a lack of foresight that could leave many self-employed people in financial difficulties later in life. The reasoning that working longer will add value to the business and in effect create a ‘nest egg’ for them could be a solution. But then again it may not. As people get older, health often deteriorates as does ability to work. In which case, retirement is the only option. I would advise all business owners who have made no pension provision to seek financial advice as soon as possible to ensure they are able to maintain a decent standard of living after stopping work.”
* Source: Prudential independent research, published 17 October 2012.