'Grey' start-ups spur business boom

Many over 50s are far from ready for retirement

The number of businesses being set up by people aged over 50 is on the increase.

So-called "grey entrepreneurs" account for approximately 15% of all business start-ups in England and Wales, according to a Barclays Bank survey.

Entrepreneurs aged 50 and over are becoming a force to be reckoned with in the UK economy

Barclays Bank

This compares with 10% a decade ago. Older entrepreneurs are also responsible for 50% more start-ups in absolute terms than they were 10 years ago.

Barclays said that "entrepreneurs aged 50 and over are becoming a force to be reckoned with in the UK economy".

Demographic shift

The growth in older business owners has been attributed to a demographic shift, where it is more common for older people to work past 50.

It also reflects the composition of today's population. More than a third of people will be older than 55 in 2025, compared with a current one in four.

Redundancies, retirement or dissatisfaction with previous jobs are spurring older people to start up their own companies.

Nearly a fifth of "grey" start-ups were founded using redundancy payments.

And more than half of them set up in an area the owner had worked in before.

Less money

However, the older generation tends to make less money than younger entrepreneurs.

Average turnover for businesses owned by the over 50s is £70,000 compared with a national average of £104,000.

But to offset this, the older owner-manager faces less stress as only 27% rely on the business as the family's sole source of income.

And older people seem to think more clearly about objectives and pitfalls, according to the survey.

While 43% of grey start-ups prepared a business plan before going it alone, only 23% of under-50s did, the report added.

Research for the survey was conducted in April, using a sample of 473 businesses with turnover of less than £1m.