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Self-employed 'to lose out' under pensions changes

The self-employed are likely to miss out under the government's new pensions reforms, according a new report.

The Scottish Widows study, which examined the potential outcomes of the introduction of Personal Accounts as suggested in the government's Pension White Paper, said the self-employed will lose out because they will have no access to the State Second Pension and no employer to contribute to their pensions.

A self-employed man on median earnings might receive only £46 a week from a Personal Account in real terms, Scottish Widows said, if he contributes continuously from age 22 until retiring at age 65. In comparison, an employed man who contributes the same amount could receive £74 a week.

The report added that changes to the savings credit mean the average self-employed man will only be £12 a week better off at age 68 than if he had saved nothing at all, and just £2 a week by age 78.

Ian Naismith, from Scottish Widows, said: The position of the self-employed is a particular concern. Not only do they lose out on State Second Pensions and employer contributions, but the changes to means-tested benefits work against them and mean that much of their incentive to save for retirement is lost."

Late payment 'on the increase'

The amount owed to UK SMEs in late payments has risen by £5bn over the last two years, new research claims.

According to the study by BACS, an increasing number of SMEs are suffering late payments. Some 59% said they had experienced problems with delayed customer or supplier payments, almost double that of findings in 2004 which showed just a third experiencing the same issues.

The research also showed the total amount of money owed to UK SMEs is on the increase. Collectively, the amount of money outstanding to companies with 250 employees or less has rocketed from £11bn two years ago, to almost £16bn this year.

Michael Chambers, managing director of BACS, said "The fact that UK SMEs are waiting on £16bn is staggering and shows that the impact of late payments cannot be underestimated.

"Late payments now pose a considerable problem for more than half of all SMEs in Great Britain - if this figure continues to rise, the knock on effect for the UK economy could be disastrous.

"Business and financial managers up and down the country need to tackle late payment issues head on to safeguard the commercial interests of their organisations."