Retirees planning new firms thanks to pension freedoms

About 10% of soon to be retirees plan to capitalise on the pension reforms to start a small business or go into consultancy, research suggests. A study looking at the intentions of over 55s who are due to retire in the next 18 months found one in ten would consider drawing down on their pension pots to launch some kind of entrepreneurial venture.The 'later-life entrepreneurs' trend, as researchers described it, could lead to over half a million over 55 year olds shunning retirement, they said.{desktop}{/desktop}{mobile}{/mobile}The average value of a pension pot of those asked was found to be £550,000, and of those considering withdrawing money to invest in a new business, almost half (47 per cent) intend to use their 25 per cent tax-free lump sum to fund their start-up.The survey by AXA Wealth found that realizing a lifelong dream to be a business owner was cited as the top motivation by 35 per cent of those intending to start up a company.Monetising a hobby was revealed as the investment incentive for a quarter and 19 per cent were driven by the urge to utilise the experience and skills gained throughout their career to boost their income.The research also revealed how the pension reforms will vary in impact upon the UK's different regional economies.The South West is expected to most likely experience a mini boom in teashops and restaurants with 22 separate new establishments being considered, while the Midlands could see a resurgence in manufacturing, with 25 new production facilities being considered in light of newly invested start-up capital.Adrian Lowcock, head of investing at AXA Wealth, said: "We're seeing a revolution when it comes to retirement spending. The widespread concern that pensioners will blow their whole pension on a supercar feels exaggerated. Instead we are seeing a diverse approach; with the over 55s taking to the freedom and opportunities created by the pension reforms – in this case fuelling a whole new generation of later-life entrepreneurs."

Retirees planning new firms thanks to pension freedoms

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