27th November 2015
Forget bright young things, ‘oldpreneurs’ are using their pensions to start up new businesses.
In a report by Clifton Asset Management and pensionledfunding.com, it is predicted that £400 million of pension funds will be taken to help new business owners over the age of 50 to get their business started.
Funding business ventures through pensions has been made possible by the introduction of pension freedom, that lets over-55s access cash lump sums from their defined contribution pension pot.
A Nesta report also found that pension-led funding was worth £25 million last year and that two-thirds of small and medium-sized businesses using this funding model reported increased profits and half employed more people. The average sum raised through pension-led funding in 2014 was £70,527.
Adam Tavener, chairman of Clifton Asset Management and pensionledfunding.com, said: ‘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.
‘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-to-49 age group, the UK economy could be boosted by £88 billion.’
Over half of all start-ups fail in the first five years but 70% of businesses started by those aged over 50 survive for at least five years – compared with just 28% of those started by younger people.