Lobby group the Institute of Directors (IOD) has suggested that older entrepreneurs should be allowed to dip into their pension pot without a tax penalty to fund a new business. This would be in addition to the existing 25% tax-free allowance and should be policed by pension providers. The Institute of Directors has also suggested that the government allow people to pay for training during their working lives from their gross pay, in a similar way to salary sacrifice schemes such as the cycle to work or childcare vouchers.
Speaking about the proposals, Lady Barbara Judge of the IOD said:
"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. 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."
"The changing nature of work will fundamentally affect us all. This, combined with an ageing population, will pose serious challenges to society. People in their sixties now are on the front line of the shifting boundaries between work and retirement. The Government should consider introducing tax incentives to encourage people to pursue their ideas and invest in training so that they can continue to have fulfilling working lives beyond the age expected by previous generations."
When asked about the proposals by the BBC, the Treasury said that any new tax measures would be outlined in the Budget and could not comment directly on the IOD's proposals.
"We have already made major reforms to pensions that give hard working people real freedom and choice over how they access their retirement. Many people can now access their pensions from age 55 and can also withdraw up to 25% of their money without paying tax," a Treasury spokeswoman said.