New findings from a comprehensive study of SME businesses in England have shown that a tenth (10%) of SME leaders in the telecoms and IT sector are concerned about their firm's ability to fund future pension contributions, contributing to a grand total of over 43,000 businesses across the country with the same worry.
The latest figures are published in an international report from GE Commercial Finance, the business-to-business financing arm of GE.
With only 35% of UK firms with five or more employees currently providing some form of pension, this new data shows that that pension provision, retirement and succession planning are a major headache for SME leaders moving into 2007.
John Jenkins, CEO of GE Commercial Finance, Business Finance, commented: "As large businesses and the public sector are often the main focus of pension discussion, it is easy to overlook the difficulties being faced by SMEs."
Maximising the value of the business and succession planning
The study found that whilst nearly three quarters (70%) of SME leaders in the telecoms and IT sector (74% in total across England) are expecting their personal pension plans to fund their retirement, almost two fifths (38%) (38% in total) are also expecting their personal assets, such as the family home, to help with their retirement plans.
A smaller group, 6% of respondents in England in general, was also looking for the sale of the business or release of equity to help fund retirement plans ? however, none of the telecoms and IT firms questioned stated that they had undertaken any planning to maximise the value of their business (compared to 64% across the country that had).
"Retirement and succession planning continue to be a thorny issue for SME leaders," said John Jenkins, CEO of GE Commercial Finance, Business Finance.
"Business executives are acting sensibly by having a mix of investments ? such as pensions and other assets ? to fund their retirement, but should not underestimate the importance of planning to maximise the future value of their business. The right financial structure can unlock significant capital and equity to support retirement plans, but will also ensure that the business is in a strong position to prosper following succession."
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