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How to become a pensioner entrepreneur

As a result of last year’s pension reforms, retirees from the age of 55 can withdraw all, or part of their pension savings as a lump sum. Many pensioners are using their pension fund as start-up funds for a new business.

There was a time when retirement was regarded as a time to relax in an armchair and not do very much. That has changed, with pensioners living longer and pursuing interests and hobbies. Having access to pension funds has led to many pensioners becoming, turning something they love or is a hobby into an income generating business.

The risks

Setting up a business is risky, but 15% of the total workforce is self-employed, so the risks do not deter entrepreneurs with a good business idea.

Peter Green of Saga said:

“People who set up businesses later in life have a much greater chance of success as they have the benefit of experience and financial wherewithal.”

If you have a business idea and are confident that it will work, there are steps that you need to take to turn your concept into a business.


The first step is to research the market. This means identifying the target market then creating a profile of a typical customer; their financial status, education, age, gender (if appropriate to your business idea) and interests.

Unless your idea is unique there will be competitors and any new business needs to distinguish itself from the competition on price, quality or customer service.

The business plan

A business plan is a detailed description of the business, how it will operate, who the target market is and the financial details. The plan should list what is needed to start the business including equipment, office or workshop costs, marketing and setting up a website.

Finances and tax

All business income and expenditure must be recorded and all financial information tracked.

Newly self-employed people have to register with the HMRC. Their website has useful guidance for the self-employed.

Each year a self-assessment tax form has to be filled in. The business profit plus any pensions and other income is the amount liable to tax, though a personal allowance means that around £10,600 is tax free. Self-employed people over the state retirement age do not need to pay National Insurance.

A professional accountant will make sure that the business accounts are correct and can advise on all tax matters.

Posted by Peter
February 1, 2016

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