A recent growth in the number of people who are choosing to start up their own business and become self-employed, is apparently being driven by the over 50s.
As a consequence of finding it increasingly difficult to find full time work, many baby boomers who are not yet ready, or financially not in a position to choose retirement, are instead choosing to run their own business.
The increased pension freedoms, which now mean it is possible to access pension ports from the age of 55, mean that some are taking a lump sum from their nest egg to help fund a new business venture.
According to figures released by the Office for National Statistics (ONS) there were 4.6 million self-employed people in the UK at the end of 2015. This figure is an increase from 2008. ONS data reveals that the over-50s make up 43 per cent of new start-up business owners. In the workplace the figure is less – with just one third of over 50s who are employees.
The ONS statistics also reveal that self-employed business owners are less likely to retire at the same age as their employed counterparts. By the age of 70, almost 60 per cent of those still in work are self-employed.
There is also evidence, that despite age discrimination legislation, mature workers are finding it difficult to obtain work the modern workplace.
According to Age UK’s “Later Life in the UK” report, published in December, there are 2.9 million people between 50 and state retirement age who were not in employment. Only 700,000 of them regarded themselves as retired; however, 1.7 million thought they were unlikely to work again.
Christopher Brooks, senior policy manager at Age UK, says that for some older professional workers it is increasingly accepted that becoming an industry consultant after leaving is a natural step. “They have a lot of expertise and experience and often, as they get older, they want to work flexibly,” he says.
“Part of the reason that people opt to become self-employed or set up businesses is that it is very difficult to get back into work when you are aged over 50. A lot of people over 50 really want to work. High-skilled professionals may also have a lump sum from redundancy to invest in a business.”
However, earning money is not the only reason to set up a business as it could also be good for your health. Chief Medical Officer, Professor Dame Sally Davies, produced a report which suggests that that those between the ages of 50 and 70 are healthier if they continue to work.
BJ Chong, a partner who specialises in company law, commented: “With increasing life expectancy and greater pension freedoms, it is no wonder that so many over 50s are rejecting the notion that they should be preparing for retirement and are instead exploring other avenues to utilise their business talents and expertise.
“Opting to become self-employed is an exciting step but anything which can help smooth this path should be investigated before jumping feet first into a new business venture.
“Good legal advice in the early days is crucial and at Palmers we have helped countless new business start-ups – from sorting out company formation paperwork to providing intellectual property advice.
For further information on all aspects of legal advice for entrepreneurs, new business start-ups and SMEs, please contact us.