Over half of individuals over the age of 50 have described themselves as ‘entrepreneurs’, shaking up the popular perception of start-up founders being twenty something tech whizz-kids or trendy millennials from Silicon Valley.
The survey carried out by the Institute of Directors (IOD) and published in a new report, the ‘Age of the Older Entrepreneur’ shows that the over 50s are increasingly using their pension pots to start up their own businesses, rather than spending their twilight years buying a Maserati or sunning themselves in the Algarve.
‘It is a cause for celebration that an increasing number of experienced workers are going it alone as entrepreneurs. I have long been an advocate of working later in life, but it is crucial that those who choose these routes have the right tools, and feel adequately supported in the process’,
says Lady Barbara Judge, Chairman of the IoD.
‘They are people with wisdom, experience and good judgement, who can have many years of productive work ahead of them. Choosing to take financial and business risks later in life can be difficult and I applaud any person who decides to take this route.’
So what type of businesses are being set up?
A range of businesses are being set up, according to the report: from a natural lubricant range called YES set up by Susi Lennox (aged 72), to an online recruitment platform that helps over 50s find work set up by Steve Perry (aged 59).
Lennox started her natural lubricant range with her partner Sarah in 2003. ‘We spent three and a half years researching, planning and formulating products, then started trading in August 2006,’ she says. ‘Having met in the late 80’s, Sarah and I had been long standing friends and colleagues.’
Perry set up his business by accident after a client meeting. He found that there was a big gap in the marketplace for helping over 50s to find employers and he also wanted to ‘champion the cause of older workers’. ‘I am trying to change the way that employers recruit and to tackle ageism in the workplace,’ he says.
A more flexible tax system
The IoD has called for the tax system to be made more flexible in order to encourage individuals to access different types of training through their working lives, proposing the introduction of a ‘shadow personal allowance’ to be offset against an individual’s income tax liability.
The IoD also wants a government consultation into the introduction of limited, tax-free withdrawals from personal pension pots if money is earmarked for start-up investment, in addition to the current 25% tax free allowance.
The ‘grey pound’ is cashing in …
The change in labour markets, the fact that people are living longer and the desire for more flexibility within the workplace has spurred the over 50s to set up their own businesses. The current poor returns in savings has also led the older generation to try and use their savings constructively.
The IoD believes that more can still be done to encourage people to engage with start-ups and entrepreneurship throughout their lives. The report concludes that more needs to be done to improve ‘the wider cultural perception of what makes a typical entrepreneur, not to mention building on the strength of peer-to-peer support networks up and down the country.’