Pension freedoms are allowing over 65s to use cash for new business ventures, turning them into powerful wealth creators. Meet the olderpreneurs…
The number of self-employed people aged 65 and over has more than doubled in the past five years. And now, the UK’s growing army of so-called ‘olderpreneurs’ has a new source of funding – the biggest change to of pension funds in a generation.
In April this year, reforms announced by chancellor George Osborne in the previous budget allowed people over the age of 55 to now withdraw as much money as they choose from their pension savings.
According to estimates by Clifton Asset Management and Pensionledfunding.com, some 100,000 older fund holders are expected to cash in around £400m of their pensions and, enjoying the benefits of a tax-free allowance, fund new ventures this year –becoming prolific wealth creators in the process.
The news follows the announcement by the Association of British Insurers (ABI) earlier this month that the UK’s over 55s cashed in more than £4.7bn of their pensions in the first six months following the introduction of the pension freedoms.
“We’ve seen a marked rise in entrepreneurs aged over 50 looking to use their pensions to either start a business or fund an established enterprise,” according to Adam Tavener, chairman of Clifton Asset Management and Pensionledfunding.com. “Providing funding to these experienced individuals, who have the energy and enthusiasm to start and run a business, is vitally important to the growth of the UK economy. Research has shown that if the employment rate of 50 to 64 year-olds matched that of the 35-49 age group, the UK economy could be boosted by £88bn.”
And there is mounting evidence that olderpreneurs’ start-up ventures are more likely to thrive than those formed by younger people: according to research from over-50s business starter support charity PRIME, more than 70 per cent of ventures started by sexagenarians survive for at least five years, as compared to 28 per cent of those initiated by younger entrepreneurs.