‘Silver start-ups’ boosted by UK pension reforms

When Suzanne Noble visits Silicon Valley investors, they often tell her she does not fit the mould of a typical tech entrepreneur.

“I get asked, ‘How long are you going to stick at it? Do you already have a plan to pass the baton to someone else?’” she says.

In a world of Mark Zuckerberg-lookalikes in their 20s and 30s, London-based Ms Noble is a woman approaching her 55th birthday. But, as she tells potential investors that her aims for Frugl, her one-year-old London events and offers app, are far from modest.

“I want this to be a global business. I could get to an eBay level. This is no small ambition,” she says.

Ms Noble may feel alone in Silicon Valley, but in the UK she is far from it. Some 6.5 per cent of over-50s in Britain are involved in entrepreneurial activity, higher than the rate for 18 to 29-year-olds, the Global Entrepreneurship Monitor, an international study, found last year.

That is expected to increase further after reforms to the pensions system this year opened access to large lump sums to people aged 55 and over. Before reform, those people would have had to spend the money on annuities.

One in 10 over-55s due to retire in the next 18 months are considering using their pension savings to help start a small business or a consultancy, according to an April survey by Axa Wealth.

Ms Noble, a former public relations director, had long dreamt of starting a tech company, but the opportunity arose only when her children left home for university, prompting her to downsize.

The proceeds from the sale of her house went to starting Frugl, which was inspired by her own “passionate bargain hunting” and what she felt was a lack of good events listings online in London.

1 in 10

Proportion of over-55s nearing retirement who are considering using pension savings to start a business

Maite Baron, an executive careers coach, says Ms Noble’s mid-life entrepreneurial zeal is not unusual. “When people’s children become independent they can think more about what they really want, instead of prioritising someone else’s needs,” she says.

“Their current assets can become start-up capital. I ask them, ‘What are the things you wanted to do but never had a chance?’ Many people have hobbies they have spent hours and hours on, but it hasn’t occurred to them that they could be a business.”

Part of the process is about abandoning job-based identities — teacher, chef, banker, lawyer — in favour of a broader view of a person’s abilities, says Ms Baron. She began taking an interest in older entrepreneurs when the financial crisis brought a series of former executives to her door, looking to reinvent themselves.

But longer life expectancies have also played a part in the trend for “silver start-ups”, as people reaching traditional retirement age look forward to what may be decades more of good health and no longer want the retirement “cliff edge” — simply stopping work, never to return to paid employment — that characterised the retirements of earlier generations.

Sarah Drinkwater, head of Google’s Campus hub for entrepreneurs in London, set up Founders over 50, an education and networking programme, this year after several older entrepreneurs approached her to complain of a lack of peer support and visibility.

“People aged 50 and over are really able to assess risk, they have decent capital behind them, they often have 25 to 30 years of experience and deep knowledge and contacts in their particular field. They make really interesting founders,” she said.

Google received 10 applications for each place on its pilot programme, launched last June. The oldest to take part was 79-year-old Graham Lyons, a music teacher and author who runs Useful Music, a digital sheet music start-up.

Ms Drinkwater is keen to avoid patronising assumptions, such as that over-50s entrepreneurs would need basic technological help. “Every 60-plus person I know has a tablet. They have their own patterns of internet consumption. There’s a slightly outmoded view that older people are not great with technology, but different types of people just use it differently.”

Not all founders have Ms Noble’s scale of ambition. Janet Morgan, 57, from Kent, founded Glitterwitch, a craft supplies website, after taking early retirement from her health and safety job in the railway industry.

Always a keen knitter and maker of decorations, Ms Morgan noticed a mail-order craft supplies business advertised for sale in a magazine. She could not resist spending her nest egg on the company. Revamped and moved online, it became Glitterwitch, and now has customers around the world.

“I said to myself that if that bank account ever hits zero, I’ll pull out, but it’s still going. It’s taken on a life of its own,” she says.

Ms Morgan has limited mobility because of a chronic illness, but has connected with other small businesses through Facebook and Twitter. “We all work from home and we all go through the same problems,” she says.

As a sole trader, she is typical of over-55 business founders. “The majority of businesses being set up by this age group are sole traders but they are still making a major economic contribution,” says Barrie Hopson, a writer and psychologist with an interest in older workers.

This is not restricted to young retirees. The number of over 65s who are self-employed more than doubled in the five years to 2014 to reach nearly half a million, according to the Office for National Statistics.

Axa Wealth’s research into the age group comes with a health warning. “Although small businesses are the backbone of Britain, most fail to make a profit and end up losing all their investors’ money,” Axa says.

Succession is also a problem. With her children uninterested in craft supplies, Ms Morgan is not sure what she will do with Glitterwitch when she is ready to retire for a second time.

The picture is different for those hoping their start-up will go stratospheric, and who are seeking to emulate the over-55 founders of big businesses, from KFC to Porsche.

Ms Noble has just closed her first funding round after convincing investors that grey hairs do not imply a lack of energy. She raised £55,000 — in an effort she describes as “challenging”.

“I told them: ‘I wouldn’t be doing this if I didn’t want to see it become really successful. I’m in for however long that takes.’”

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