Pensions time-bomb

by Steve Hemsley The licensed trade is sitting on a pensions time-bomb with many landlords facing a grim future and being forced to work beyond the age of 65 to make ends meet. Self-employed tenants in leasehold and freehold properties are most at risk from the UK pensions crisis, which was exposed in December when the Govern-ment warned that people will need to save more, work longer or both to address a £27bn shortfall in retirement savings. Many licensees have private pension schemes but plummeting stock markets have severely hit returns which will worry landlords who were planning to retire in the next few years. According to performance monitor Russell/Mellon CAPS, UK pension funds suffered falls in their overall performance for the third successive year in 2002, which is the first time this has happened since records began. The average fund lost 11.3% of its value last year which followed an 8.9% drop in 2001 and a 1.0% dip in 2000, making it the worst three-year period of performance since the middle of the 1970s. The country's oldest brewer, Shepherd Neame, insists its licensees retire at 65 but vice-chairman Stuart Neame admits he has no idea how many of his mainly self-employed tenants have made sufficient pension provision. "We encourage people to put money into a pension scheme but we would feel uneasy recommending any fund at the moment and it is not our business to pry," he said. "But we do not think it is good for the pub or the landlord if people work beyond 65, although there will always be jobs for experienced temporary managers over that age." He believes tenants would have seen a better return from investing in their business rather than their pension over the last five years. The Society of Licensed Vic-tuallers is being asked to provide welfare payments to an increasing number of pensioners from the licensed trade who have fallen on bad times. Spokeswoman Beverley Frost said the association's charity provides regular weekly payments of between £5 and £20 to around 220 people and has made one-off payments to hundreds of others. "We are helping people who had relied on the state pension and some savings but who, after a few years, have realised that with low inflation, low interest rates and a poor stockmarket, they cannot survive without our assistance," she said. "Many licensees will have to work longer in future and we expect to be asked for help by more and more." David Thomas of the Old Courthouse in Cove near Farnborough is self-employed and has just signed a new 30-year lease with Unique. Although he is 59, he does not expect to be able to retire comfortably for another 10 years. "If I wanted to retire at 65 things would be tough, so for personal reasons I will continue past that age and although this is a physical job, it is possible to cope by getting in managed help as you need it," he said. Terry Conebar has worked in the pub trade for more than 30 years and was self-employed until last August when he agreed to manage Young & Co's Waggon & Horses at Surbiton in Surrey. "Pensions are a big issue in the industry and during my career I have had a personal pension and endowment policies which pay out at different times. It's still my intention to retire before 65, although there are no guarantees," he said. The Laurel chain's HR and rewards manager Keith Luxon is confident the group's managers ­ numbering more than 1,000 ­ will enjoy a relatively comfortable retirement without having to work past 65. Most are enrolled in its final salary scheme which was closed to new members in 2001, the same year the scheme transferred from Whitbread. Laurel also contributes 6% of salary to a monthly money purchase scheme called Pension Saver into which staff pay a further 4%.