Over 55s to cash in £400m in pensions to fund businesses
Start-ups founded by "olderpreneurs" are more likely to succeed than those started by entrepreneurs aged under 50
UK entrepreneurs aged 55 and over – dubbed “olderpreneurs” -are set to cash in an estimated £400m of their pensions in order to fuel the growth of their start-up businesses, according to estimates by Clifton Asset Management and Pensionledfunding.com.
The findings suggest that more business owners over 55 are capitalising on the government's recent introduction of pension freedoms in April and are opting to take their tax free cash lump-sum to “create wealth” rather than “go on cruises”.
Clifton have also flagged up recent research by PRIME which suggested that olderpreneurs starting a business are more likely to be successful than their younger counterparts. 70% of businesses started by people in their 50s were likely to survive for a least five years, compared to only 28% of businesses started by those aged under 50.
Entrepreneurial activity among the over 50s has risen by more than 50% since 2008, according to the latest Global Entrepreneurship Monitor.
Adam Tavener, chairman of Clifton Asset Management and Pensionledfunding.com, commented:
“We have seen a marked rise in entrepreneurs aged over 50 looking to use their pensions to either start a business, or fund an established enterprise. However, the government pension changes are not a giveaway for all business owners – particularly for those that wish to mobilise tens of thousands of pounds from their pension to fund their business.
“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.”