Old man bench
The biggest pensions changes in a generation are providing cash funding for British start-ups with 100,000 'oldpreneurs' expected to cash in around £400 million of their pensions to fund their new ventures this year, according to new research.

The study by Clifton Asset Management and Pension Led Funding follows the news from the Association of British Insurers (ABI) earlier this month that the over 55s cashed in more than £4.7 billion of their pensions in the first six months after the government introduced greater pension freedoms. Business owners over 55 have always had the ability to take their tax free cash lump since, but since the government introduced pension reforms in April, more business owners are choosing this route.

Adam Tavener, chair of Clifton Asset Management and Pensionledfunding.com, said: "We have seen a marked rise in entrepreneurs aged over 50 looking to use their pensions to either start a business, or fund an established enterprise. However, the government pensions changes are not a giveaway for all business owners - particularly for those that wish to mobilise tens of thousands of pounds from their pension to fund their business.

"Providing funding to these experienced individuals, who have the energy and enthusiasm to start and run a business, is vitally important to the growth of the UK economy. Research has shown that if the employment rate of 50 to 64 year-olds matched that of the 35-49 age group, the UK economy could be boosted by £88bn."

Experience trumps youth

There is evidence that the 100,000 'olderpreneurs' setting up in business are likely to be more successful than their younger counterparts. More than 70% of businesses started by people in their 50s survive for at least five years, whereas only 28% of those started by younger people last that long. Entrepreneurial activity in the over 50s has risen by more than 50% since 2008 according to the latest Global Entrepreneurship Monitor.

Nicola Horlick, non-executive director at Clifton Asset Management, said: "As you need an accrued pension of more than £50,000 to make the pension-led funding process viable, the over 50s are more likely to have sufficient funds available. These funds might be held in a number of different pension arrangements by one or more owners/directors."