Government urged to unlock older entrepreneurship with tax-free pension access
Aspiring older entrepreneurs should be given greater tax-free access to their pension savings in order to fund new business ventures, a lobby group has advised.
In its new Age of the Older Entrepreneur? report, the Institute of Directors (IoD) has urged the government to extend the existing arrangements that allow retiring workers a 25 per cent tax-free withdrawal from their pension savings, if the money is earmarked for a new business.
A relaxing of tax penalties by the Treasury would help fuel entrepreneurship among talented older people in an ageing population, the IoD claimed.
Outlined in the report was a theoretical 100, 000 cap on the withdrawal amount, or ten per cent of the fund’s value, if the money is invested in the same year.
The group also called for greater flexibility in the tax system to help workers of all ages access skills training, and proposed the introduction of a ‘shadow personal allowance? to reflect individuals? income tax liability and support new enterprise.
Commenting on the proposals, Lady Barbara Judge, chairman of the IoD, said the wisdom, experience and good judgement? of would-be older entrepreneurs should be met with a greater financial support for starting a business.
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, she said in a statement.
it is crucial that those who choose these routes have the right tools, and feel adequately supported in the process.
Research from the IoD revealed that over half of its members identified as entrepreneurs, with a majority of respondents aged over 50 years old.
Judge added: Choosing to take financial and business risks later in life can be difficult and I applaud any person who decides to take this route.
The rise of the olderpreneur
A recent study confirmed Britain’s older entrepreneurs the olderpreneurs? to be the fastest-growing age group of new business founders in the last ten years.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
It was the first Autumn Statement under Theresa May's leadership, and for Philip Hammond, the first opportunity to outline the government's priorities for startup tax breaks since the Brexit vote in June. more»