For 49% of small and medium businesspeople the savings account is the main provision for their pensions. Of this group, 44% have arranged part of their pension provision via their former employment association and 34% have investments.
For 49% of small and medium business people the savings account is the main provision for their pensions. Of this group, 44% have arranged part of their pension provision via their former employment association and 34% have investments. Only 34% of small and medium business people have taken out annuity insurance. These were the findings of an Intomart/Gfk survey* commissioned by the insurance company Delta Lloyd.
Amongst the self-employed the savings account is also the main pension provision (43%). 37% have a partial provision via an employment association, 30% have investments and 41% have taken out annuity insurance. 35% of the self-employed see the value of their house as their main provision for retirement.
The business person builds up a pension via various ‘routes'
The way in which business people build up their pensions is characterised by a combination of different "routes" for building up a retirement fund: saving via a savings account, pension via an employment association, investments and annuity insurance.
Start-up small and medium business people have increasingly taken advantage of the opportunity to build up their pensions via a separate trade association (BV) pension. Start-up small and medium business people make less use of investments (16%) as a pension option. They are also less inclined to see the value of their business as their pension (4%). The value of the business also scores relatively poorly amongst small and medium business people and the established self-employed (21%).
A buffer for bad times and making private purchases
Both start-up business people (30%) and the self-employed (26%), alongside their retirement pot, also build up assets in order to create a buffer for their job in leaner times and so as to save for making private purchases, such as a car, boat or home. Inheritance for relatives also plays a part.
No capacity at the current time to build up assets
15% of small and medium business people admit that at the current time they cannot build up any assets. The figure is 21% amongst the established self-employed. 17% of small and medium business people build up assets for future expansion of their business, whereas for the self-employed the figure is only 8%.
Bespoke solution for business people
The tax system offers the self-employed business person without staff the opportunity to build up a retirement fund, by withdrawing funds against the balance. By making use of this Fiscal Retirement Reserve (FOR) the business person reduces his or her profits. In this way he or she does not have to pay any tax on this amount. Tax is only levied once this Fiscal Retirement Reserve matures.
The business person can take out annuity insurance against the balance of the funds available. In that case tax is levied on the annuity payments. Another option is to turn the annual tax allowance into a flexible life annuity policy as an attractive top-up to your income later on. In this way the pension can be built up or topped up.
Further information about solutions for business people can be found on the Delta Lloyd website and at www.deltalloyd/.nl/mkb and www.deltalloyd.nllondernemerzonderpersoneel.
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Further information:
Marc Smulders
Spokesman for Delta Lloyd Insurance
Telephone: (020) 594 27 07
E-mail: pers@deltalloyd.nl
* The survey commissioned by Delta Lloyd was carried out by Intomart/Gfk amongst 540 start-up self-employed business people, established self-employed business people and start-up small and medium business people aged 18 and over.