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news opinion


Pension auto-enrolment is sneaking up on SMEs, and it’s surprising how many small and medium-sized enterprises are unprepared for the event


Workplace pensions must be generally regarded as a good thing. We are, after all, living longer, and therefore likely to need pension income for a good number of years – perhaps as many as 30. And yet, we are woefully untroubled by what is expected to be a major economic crisis in the years ahead.


Auto-enrolment aside, successive governments have been reluctant to tackle the pensions issue. They have, for instance, allowed many pensioners to become shackled by uncompetitive annuity schemes that have denied older people the pension income they are fully entitled to.


Of course, the problem of funding pensions is a global, rather than just national, one. The funding gap is there because young people are tending to start work later and are thus paying tax later, and this while older people are perhaps having 30 years of retirement.


No wonder a report by a leading professor at University of Southampton recommends the worldwide removal of a fixed or default retirement age (DRA). The UK abolished the DRA in 2011 but many other countries still have it, and that is unsustainable for the global economy.


Here, our current focus is on auto- enrolment. At a recent seminar hosted by law firm Blandy & Blandy, a good number of people in the audience said they didn’t support automatic enrolment.


That’s probably because the Government hasn't done enough to simplify the process for employers. The jargon itself could be clearer, the benefits could be better explained.


What we must remember, meanwhile, is that auto-enrolment is ensuring that for many, some money is being put aside for retirement for the first time. That’s got to be a good thing.


David Murray Publisher


www.businessmag.co.uk


Optimism suggests accelerated growth


Business optimism reached its highest level for 22 years in January, indicating that the economy will continue to grow rapidly over the coming six months, according to the latest Business Trends report by accountants and business advisers BDO LLP in Southampton.


The BDO Optimism Index, which predicts business performance two quarters ahead, reached 103.8 in January, up from 103.4 in December. This is the highest reading ever recorded since readings began 22 years ago and sits well above the 100.0 mark, meaning the economy is expected to outperform its long- term historical growth trend.


In the manufacturing sector, the Optimism sub-index rose to a new all-time high of 117.1 in January, up from 115.5 in December. And for services, which accounts for roughly three quarters of the economy, confidence rose to 101.2 in January, up from 100.7 in December.


In tandem with improved confidence, businesses’ hiring expectations increased markedly over January as the BDO Employment Index rose to 101.3, up from 99.4 the previous month. The index now stands at its highest level since August 2008 and above the crucial


100.0 mark for the first time since March 2011, signalling that job creation is likely to exceed trend growth over the coming months.


In line with the overall positive outlook, low or negative business cost inflation is helping companies – especially manufacturers – control costs. The BDO Inflation Index read 97.9 in January, its lowest level since November 2009 and down from 98.7 at the end of last year.


Malcolm Thixton, lead partner and head of BDO LLP in Southampton, commented: “Business confidence has hit record highs as we enter 2014 and we expect the economy to grow rapidly in the first half of the year. Companies are raising headcounts in response to rising client demand and the data suggests that the unemployment rate is likely to fall below the Bank of England’s 7.0% threshold for considering raising interest rates in the very near future.


“An interesting feature of the recovery so far has been the way in which productivity remains at levels last seen in late 2005. Looking at this optimistically, this means that the economy can continue to grow for some time by increasing productivity before wage-related inflationary pressures begin to kick in.“


Superyachts go British new luxury vessel as a modern take on a classic gentleman’s motor yacht.


Ambitious plans have been launched to build a ’Best of British’ classic superyacht in the south. Burgess Marine, Britain’s largest independent ship repairer, and naval architect Laurent Giles have joined forces for Project Nelson at Trafalgar Wharf, Portchester.


Entitled Project Nelson, named after national naval hero Lord Nelson, the aim is to create a


@TheBusinessMag Business THE M A GA ZINE TM


The business partners are seeking an enthusiastic investor or owner for the scheme who is passionate about the ’Best of British’ ethos and wants to become integrally involved in a project which could create up to 200 jobs.


The plans come hot on the heels of Burgess Marine’s double-contract success last year with operators Wightlink and Gosport Ferry.


In the April 2014 issue of The Business Magazine


• Commercial Property • Team Building • Technology: managing data • Security


Details: 0118-9766410 sales@elcot.co.uk


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MARCH 2014


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