When Chancellor George Osborne announced Pension Freedoms that came into force in April 2015, it was widely welcomed by the general public and pensions industry at large. Previously, people had very little option as to the choices they had with their pension. Annuities were the only option, and with many people unaware they could shop around for these, millions chose the default annuity from their pension provider, which in the vast majority of people's circumstances was not the best paying option.
With pension freedoms however, people over the age of 55 are given virtually carte blanche as to what they can do with their pension pot. That means as well as annuities, they can choose to invest it in ISAs, savings accounts, shares, property or simply choose to spend it. However, recent report have highlighted that more and more people are choosing to be more proactive with their pension pots and have decided to start their own business, and become what has become 'Olderpreneurs'.
It is predicted that over £400 million of pension funds will be used by people over the age of 55 to find new businesses, which is a fantastic amount to be invested into the UK's economy. The outlook looks good for them too. Research indicates that subject to the individuals concerned having the sufficient experience, knowledge, skills and enthusiasm needed to start a successful business, people over the age of 55 tend to start businesses that are more successful in the early days than their younger counterparts. Over 50% of all startups fail within the first 5 years, but for businesses started by those over the age of 55, 70% survive for at least 5 years.
With interest rates remaining low and confidence in traditional types of investments not as high as it once was, today's pensioners are much more active than those of previous generations and this makes becoming an 'Olderpreneur' a much more attractive option. With the forthcoming rise in retirement ages too, it could be something that we in the UK will see more of.g