Retirement blow for West Midlands small business owners

May 14 2009 by Anna Blackaby, Birmingham Post

West Midland small business owners see retirement as a more distant prospect than their counterparts in other regions as SMEs here reveal themselves as the gloomiest in the country.

And just one of the 100 businesses surveyed on behalf of the Birmingham Post by Clifton Asset Management (CAM) has successfully applied for funding from the government’s Enterprise Finance Guarantee (EFG) scheme announced in January.

This week’s jobless figures revealing unemployment in the region is the worst in the UK and the threat of further cuts in the region’s ailing manufacturing and automotive sector have all contributed to making West Midland SME owners the most pessimistic in the country, according to the latest quarterly survey.

The research marks a year since CAM, which provides specialist financial and strategic advice to SMEs, began tracking attitudes to retirement among the region’s owner managers.

CAM director Anthony Carty said that 12 months ago, 59 per cent of those questioned in the poll said they believed retirement was further away than it was a year previously.

“That figure now stands at 87 per cent, a substantial increase which reflects the fortunes of the wider economy over the past year as the recession has taken hold,” he said. “In fact, it’s the highest percentage of any region in the country and some 37 per cent now say they do not currently see any prospect of retirement, a figure which stood at 27 per cent 12 months ago.”

Over a quarter – 28 per cent – of West Midlands companies in CAM’s survey said they had been forced to shed jobs over the past six months, with 24 per cent claiming they would be forced to make redundancies before the end of the year. Just under two-thirds – 65 per cent – of the region’s business owners said the recession meant it was not viable for them to operate a company pension scheme. Of those who do, just 31 per cent make regular contributions.

Meanwhile, CAM believes the government’s attempts to stimulate bank lending to SMEs through the Enterprise Finance Guarantee have so far failed.

Mr Carty said: “The fact that 89 per cent of West Midlands business owners say they do not see any benefit in applying for support under this scheme provides damning evidence that they continue to feel abandoned in their hour of need, by both Whitehall and the banks.

“In fact, almost half (43 per cent) of our respondents were not aware that this much-heralded scheme even existed.

“And while three per cent say they have made an application under the EFG and are awaiting the result, and a further three per cent have made an unsuccessful bid, this leaves just one per cent who say they have been able to access the crucial finance they need to help them through the most difficult economic climate for several decades.

“It is totally unacceptable that so few businesses have received any kind of financial relief via the Enterprise Finance Guarantee, or that so many have no confidence in its ability to deliver.

“Nevertheless, it is encouraging that a more positive view of Lord Mandelson’s department is emerging, with 52 per cent saying the introduction of measures such as the EFG are proof that the government recognises the importance of owner-managed businesses.”