Older people should be allowed to fund new businesses from their pension pots without incurring a tax charge, according to the Institute of Directors (IoD). In its Age of the Older Entrepreneur report, the IoD found 16% of business leaders plan never to retire, while 53% of its members identify themselves as entrepreneurs.
Pension freedoms introduced by the government in 2015 allow individuals to start accessing their retirement savings from the age of 55. Over-55s can therefore withdraw a 25% lump sum from their pension pot tax-free. But the IoD suggests older entrepreneurs should be allowed to access a further 10% of their retirement savings to start a new business in the same tax year.
Lady Barbara Judge, chairwoman of the IoD, said: “People in their 60s 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 they can continue to have fulfilling working lives beyond the age expected by previous generations.”