Three in 10 business owners do not have a pension independent of their business, according to new research.
Almost half, 44%, do not even hold an ISA of any kind.
The vast majority (95%) have money in savings accounts and/or Premium Bonds, suggesting many are prioritising short term cash over long-term planning, according to Rathbones, the firm behind the study.
Faye Church, senior Financial Planning director at Rathbones, said: “We often meet owners of successful businesses who see their company as their retirement plan and prioritise reinvesting back into the business over pension saving. That’s often driven by a desire to grow the business, and the belief that a future sale will ultimately take care of retirement. But relying on a business alone to fund later life is a risky strategy.”
She warned that the future is unpredictable. “Small businesses can be hit by economic shocks, supply chain disruption, losing customers or a crisis no one sees coming. That makes it hard to know what your business will be worth when you eventually step back – or even whether you’ll be able to sell it at all.”
She said business owners without a pension, could end up with far less to live on than planned, and even a successful sale may still fall short of funding the lifestyle people want in retirement.
Looking specifically at entrepreneurs, the study showed almost a quarter (24%) of respondents said they do not have a pension. More than a third (36%) said they do not have an ISA, although 95% do hold savings and/or Premium Bonds.
• Rathbones polled 3,092 UK adults, including almost 10% business owners.