Proper pension planning prevents publican penury

These are not entirely unexpected results. Indeed, according to a recent survey by the Resolution Foundation, two-thirds of self-employed workers do not pay into a pension policy.

But that doesn’t mean that the pub industry and its people should be complacent about this ‘timebomb’.

The majority of publicans who responded to our personal finance survey said they expected to be working past the age of 65 — and little wonder, as only 49% have invested in any kind of pension. Even among those who have, most describe their expected retirement earnings as less than adequate.

And among those who haven’t paid into a pension plan, nearly two-thirds have no plans to do so.

Acceptable level​

The National Employment Savings Trust estimates that a comfortable retirement income is £15,000 a year. So with the revised state pension expected to be worth around £7,500 a year when it is introduced in April 2016, that leaves pensioners requiring a similar private income to reach an acceptable level.

Currently — in today’s money — you’d need around £125,000 in a pension pot to produce an income of £7,500 at age 65 from a single life annuity.

And, based on a back-of-a-fag-packet calculation, that means saving around £200 a month for a 35-year-old, £400 a month for a 45-year-old, and £1,000 a month for a 55-year-old. The average age of our survey respondents was 51.

What about other assets? Around a quarter of licensees have invested in property, one fifth has meaningful cash savings, and one in 10 owns stocks and shares. Hardly a huge accumulation of wealth.

Distant memory​

Of course it’s difficult to squirrel away money if you don’t have it in the first place, or if there are other priorities, like debt repayment, utility bills and running repairs.

And nearly half of our survey respondents said they were either making a loss or breaking even. But for those 54% of publicans admitting to making a profit, one hopes they are making at least some provision for the future.

The days of the pub landlord with a Jaguar XJ6 in the garage and holiday home in Marbella might be a distant memory for most (if it was ever true!), but an era of pub landlords working in poverty until they drop will be a reality for many if the situation doesn’t improve.

Ironically, all publicans will need to auto-enrol all their staff aged 22-plus who earn more than £10,000 a year (and others if they request it) into an employer-contribution pension by February 2018 (and earlier for many).

Maybe — if they can afford it — this will prompt them to make similar provisions for themselves.