Give Silver Entrepreneurs Pension Tax Breaks, Urges IoD

Retirement is out of the question for entrepreneurs who have found success in business.

One in six have no plans to retire, says a survey by the Institute of Directors (IoD).

And more than half of start-ups are led by the over 50s, challenging the popular perception that new businesses are for youngsters.

The main reasons for retiring were mixed, says the report Age of the Older Entrepreneur.

Only 4% confirm reaching state retirement age will stop them working.

For others, travel or leisure (49%) and feeling financially comfortable (48%) are the two main reasons for not working.

Top up the tax-free lump sum

Health issues will make the decision for a third, while swapping a job for voluntary work will spur a fifth.

Because of the research, the institute wants the government to let silver entrepreneurs take money from their pensions early to fund start-ups on top of the 25% tax-free lump sum.

Another suggestion is to give retirement savers an enhanced personal income tax allowance throughout their working lives to help them fund work-related training.

Lady Barbara Judge, who chairs the Institute of Directors, 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.

Fulfilling working lives beyond 60

“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.”

She also led the call for tax incentives, arguing that entrepreneurs in their 60s have a lot to give society.

“The changing nature of work will fundamentally affect us all. This, combined with an ageing population, will pose serious challenges to society,” said Lady Judge.

“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.”

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