Yesterday saw the news that the retirement age for millions of people in the UK could rise to 75, or even as high as 81. With so many more people being in work and looking for work, what would this mean for Britain’s older generation?
The average retirement age of a business owner is going up
At Bizdaq we’ve worked with thousands of people looking to buy and sell businesses, and in recent years we’ve seen a increase in the average age of retiring business owners.
In 2014 the average age of a retiring business owner was 56, whereas in 2016 the average is 59. From these figures we can only estimate that this will continue to increase as business owner want to stay active well into their sixties.
Retirees are buying lifestyle businesses to keep them occupied
Selling for retirement isn’t the only thing we see though, as we’re also seeing more people buying businesses as a way to provide income during their retirement.
Rather than living off money saved up, investing it in a business is becoming an increasingly popular option to provide long-term income during retirement.
“I’ve seen a steady increase in the average age of business owners looking to retire across my ten years in business sales” says Sean Mallon CEO of Bizdaq. “However recently we’ve noticed a tangible increase in the number of people looking to buy a lifestyle business to run during their retirement years. I’ve personally witnessed café owners working right into their late seventies. I wouldn’t say that every business type is conducive to running in your seventies, but there are certainly a great deal of lifestyle businesses that could be run into a person’s senior years.”
What businesses can a 75 year old run?
Whilst running a business well into your seventies might seem like undue stress and a lot of extra work, this isn’t always the case. There are many different types of businesses that allow a buyer the opportunity to take over a business without having to do a lot of extra hours.
In our experience, there are three great opportunities for older people to run:
- Businesses with existing management systems – there are plenty of businesses where management systems and employees are already in place, meaning the owner doesn’t need to worry about day to day running of the business. Franchises and food businesses tend to be good examples of these, as they will have everything already in place.
- Part-time businesses – low-stress part-time jobs that allow you to be your own boss are perfect opportunities for those who aren’t ready to give up working, but want to have a reduced workload. Hire companies, solely-online businesses or even working freelance offer opportunities for an older generation to make money as and when they want to.
- Lifestyle businesses – retiring is very much a lifestyle, and whilst some people are ready to embrace that lifestyle, for others it’s an unwelcome departure from working life. A lifestyle business is the perfect mixture of both of these, as it allows the owner to take over the running of the business and the lifestyle that comes with it. Running a campsite, tour company or coffee shop all allow the owner the chance to run a business and create a lifestyle around it.
What will happen in the future?
With the news that as many as 45,000,000+ people might have to spend eight more years in employment before they can retire, we’ll no doubt see more people looking at businesses as a pension fund rather than a job – whether that’s after the retirement age or before it.