Silver entrepreneurs: Why UK pensioners are setting up businesses

Mike Kellard
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Harland David Sanders started the KFC chain after he retired (Source: Wikimedia)
As filming for The Apprentice 2015 gets underway in the City, we’ll soon be introduced to the latest hopefuls, all keen to be Lord Sugar’s business partner, and bag the £250,000 investment for their business idea.

While the previous participants have tended to be in their early 20s to mid-30s, I can’t help but wonder if the show might be ready for a slight format tweak by bringing in some more mature candidates. Might some older apprentices, who have a few years’ experience under their belt, bring a new dynamic to the show and even help change our societal attitudes of “entrepreneurial spirit” for the better?

Some of our recent research uncovered an interesting point. Thanks to the new pensions freedoms, quite a lot of over 55s are considering using some of their pension pot to start their own business.

This highlights that an entrepreneurial mindset is not only for young whippersnappers, but also those whom you might traditionally think would opt for an easier, slower way of life.

So it looks as though we’re seeing a revolution – at least of sorts – when it comes to retirement spending. The widespread concern that pensioners will blow their whole pension feels exaggerated. The reality is that few prudent people, who have been investing all their working lives, are going to suddenly change behaviour by being reckless with their nest egg.

Some people, though, will see the new pension freedoms as an opportunity to try something new. In fact, our research suggests some may draw down some of their pot to invest in a new venture – a group we are calling the “later-life entrepreneurs”. And why not? It has happened many times before.

Take Harland David Sanders, otherwise known as “The Colonel”. He started the KFC chain after he retired, and used his first monthly pension to set it up. So while it’s not a suitable option for everyone, there can be significant successes.

The average value of a pension pot of those we asked was found to be £550,000, and of those considering withdrawing money to invest in a new business, almost half (47 per cent) intend to use their 25 per cent tax-free lump sum to fund their startup.

Fostering the spirit of entrepreneurship and innovation is key for businesses that are committed to listening, learning and fostering new talent – whether that’s through the provision of a venture capital fund to help startup companies with funding expertise and market access, or detecting emerging trends.

So it looks like becoming an entrepreneur may be on the rise, and there’ll be plenty of candidates for Lord Sugar – young and old.

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