Could your pension pot fuel your business start-up dreams?
- Credit: PA
If you're the sort of person who sits and watches Dragon's Den, or reads books about going it alone such as 'Rich Dad, Poor Dad', and you're thinking 'I can do that', well now may be the time for you to switch off the telly and put the books away.Because if you're 55-plus then why not draw down some pension funds and finally work for yourself?
The government's pension reforms may see a swathe of people splashing out on investments or luxuries.
But for some it could also provide the chance to realise a dream of a different kind - that of becoming your own boss.
In fact, if you're the sort of person who sits and watches Dragon's Den, or reads books about going it alone such as 'Rich Dad, Poor Dad', and you're thinking 'I can do that', well now may be the time for you to switch off the telly and put the books away.
Because if you're 55 plus then why not draw down some pension funds and finally work for yourself?
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It's a tantaslising thought, but it won't be easy - starting up a business never is.
But there is a growing trend of the more mature, so to speak, leading the way when it comes to start ups and self employment.
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The numbers of start-up businesses is on the rise while prime minister David Cameron has also recently announced an extra £34m of funding towards Start Up loans which includes changing the criteria to make them available to those over 30.
In fact a recent Bank of England study has noted that a rise in self-employment is already being fuelled by so-called 'silver entrepreneurs', while a report by the Future Laboratory noted that businesses founded by the over 50s had a 70pc chance of lasting five years, compared to 10.5pc for entrepreneurs aged between 25-34.
So far, so good.
And John Clarke, business trainer at enterprise agency Nwes, which runs a series of courses for those looking to set up their own business, said many older workers who had been made redundant, take the decision to set up their own business in a new field or use their existing skills as consultants.
And he believed that the pensions changes could see that trend boosted by those still in employment who now have access to the capital to help get their venture off the ground.
'It's more common now to get people who have taken an early package,' he said.
'Every year we get someone looking to make a total switch. We've recently had a headmaster who has taken early retirement and has set up a photography business.
'We have often had people aged over 60. The main reason they are doing it is often not financial. They are doing it to keep their mind going, or in the case of photography it's something that interests them and they can make a bit of money as well.'
He said often the biggest challenge was helping a would-be entrepreneur shift their mindset to one of being an employee, to one of being the boss.
'They are often people who have been protected, working for a large organisation and often only in a small part of the business,' he added. 'They come to the course for that reason, because they are frightened. They are often very specialised in one area.
'If people are in a job they don't enjoy anymore I think they will make that jump.'
Simon Watson, partner at accountants and business advisors Lovewell Blake, believed that the changes might see both a rise in people looking to go it alone, and also those wishing to invest in their children's business ideas.
'The best thing that makes pensions attractive is the tax-fee lump sum,' he said. 'To be able to have a quarter of it tax free is a nice thing to have. It's a stage of your life where you either pay off the balance of your mortgage, or go on a nice cruise, but there is scope to invest in a business.
'Often If they are setting up a business, they are not really doing it for an income.
'People are providing for their pensions a lot longer than they were 10 or 20 years ago. None of us wants to work longer, and many people are gearing up to retire at 55 or 60, but they may have a desire for a second career.
'A lot of people have paid off the mortgage, and the kids' school fees and can draw down that lump sum. I have seen a lot of people use it to invest in their child's business.'