Pensioners taking on a dream job – as their own boss

THE pensions revolution could spark a wave of ‘ silver start-up’ businesses.

One in ten people approaching retirement are considering using their pension pots to become an entrepreneur, a survey suggests.

More than one in three of those planning to set up a business said it had been a lifelong dream, while one in four liked the idea of turning a hobby into a venture which could make them some cash.

The pension reforms, which came into effect on April 6, mean that those aged 55 and over can spend their pension pot how they wish, rather than being required to buy an annuity which would give them a fixed income for life.

Axa Wealth, which surveyed 1,500 people aged over 55, found that 10 per cent are considering drawing money from their pension to start a small business or go into consultancy – so-called silver start-ups.

Under the pension reforms, the first 25 per cent of the pot is generally tax-free. Of those considering a business, almost half (47 per cent) said they intended to use their tax-free lump sum to fund their start-up.

The results found regional variations in the types of business being planned, with tea shops popular in the South West and manufacturing a common goal in the Midlands. Businesses specialising in alternative medicine, travel, accountancy, computer repairs and art galleries also featured highly.

Nearly one in five (19 per cent) said they wanted to carry on using skills they had built up during their careers. Adrian Lowcock, head of investing at Axa Wealth, said: ‘We are seeing a diverse approach, with the over-55s taking to the freedom and opportunities created by the pension reforms – in this case fuelling a generation of later-life entrepreneurs.’

Margaret Mountford, who was Lord Sugar’s former aide in the BBC’s Apprentice series, warned of the risks of ploughing a lifetime’s savings intended for retirement into a business. She said: ‘You may know how the world works and have contacts and networks. On the other hand, third parties may not be so willing to finance you. A lot of businesses fail.

‘It’s important not to underestimate how much work and effort it takes in starting something off.’