Three quarters of UK small businesses are so starved of funds they cannot afford to operate a company pension scheme, new research has revealed.

And of the quarter who are able to run such schemes, only half are in a financial position to make regular contributions.

That’s according to SME adviser Clifton Asset Management (CAM), who surveyed more than 1,000 business owner-managers throughout the UK.

“We regularly hear about the ‘pensions timebomb’ because it makes a snappy headline, but these worrying figures show it is fast becoming a reality,” said Neil Greenaway, managing director at CAM.

“Amid all the recent outcry about the banks, credit crunch and recession, talk of pensions has been put on the back burner as small businesses focus on getting through this economic crisis, rather than their long term retirement plans.”

Mr Greenaway added that the issue would not go away and would likely amplify over the coming months towards 2010 when the law regarding pensions changes.

“Because of all the bad news we’ve heard about them over the last 10 years or so we tend to switch off when we hear pensions mentioned,” he said.

“It’s very disturbing to find out only a quarter of our small businesses are running company pension schemes, with just half of those making regular contributions, and I believe our research speaks volumes about the current plight and degree of apprehension most small business owners still have about the future.”

He added: “Despite recent speculation about ‘green shoots’ we are still deep in the worst recession in living memory, a fact which is obviously not lost on small business owners.”

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