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Older people should be allowed to use their pension to fund new business

Robert Palmer and Stuart Price, Partners at Quantum, give their thoughts on the recent announcement from the Institute of Directors suggesting that the government should allow older people to withdraw up to 10% of their pension tax-free to fund a new business…

The proposed allowance would be on top of the existing 25% of the pension pot that people over the age of 55 can take as a tax-free lump sum.

The proposal is an interesting one and may help to stimulate business growth and meet the needs of an ever aging population, and it will certainly add to the flexibilities already on offer. People are living longer and as a consequence working longer – many into their mid and late seventies – so the concept could be of real interest to them. Older people don’t necessarily want to be working nine to five, five days a week, or doing strenuous, manual jobs. Offering an incentive like this could allow them to set up a business that they can run in their own time which utilises experience gained throughout their working lifetime, doing roles they enjoy and are physically able to do.

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