The Good Retirement Guide 2020

Everything You Need to Know About Health, Property, Investment, Leisure, Work, Pensions and Tax

Jonquil Lowe

• Publisher: Kogan Page
• Year: 2020
• ISBN:
  9781789660661
• Edition: 34
• Topic: Personal Development
• Subtopic: Personal Finance

Whether it is a relaxing, action-packed or financially rewarding retirement you are planning for, this is the book for you. Fully revised and updated, The Good Retirement Guide 2020 is packed with hundreds of useful hints, tips and insights into your retirement preparation. In retirement, personal ambitions can be realized and new experiences enjoyed, yet with so much to consider, people are often unsure how best to plan for their future. The scope for concern and confusion is even greater with the uncertain economic and political climate, changing retirement ages, the pressures of an ageing population, and evolving pension rules. Making the most out of retirement by changing to a new career, or starting your own business, only adds to the plethora of retirement options. The Good Retirement Guide 2020 is an indispensable book that you will refer to again and again, offering clear and concise suggestions on a broad range of subjects for pre-retirement planning in the UK. Including information on: finance (investments, pensions, annuities and drawdown, benefits and tax), housing, health, holidays, starting a business and looking after elderly parents, this book will help you to save more, live better, and be happier.

08

Starting your own business

Retirement as a time of endless leisure is not necessarily an appealing prospect, but it can be the opportunity to try something different that happens to involve self-employment or to fulfil a long-held ambition to start your own business. Of course, working in retirement may be a necessity if income is short or you are bridging a gap until your pension starts, and in that case you should seriously weigh up the option of taking a paid job working for someone else versus working for yourself. Running your own business can seem to offer an attractive flexibility over how, when and where you work, but it is no soft option. If your business is to be a success, it may require a great deal of mental, physical, emotional and time input, though this will vary with the type of business you choose.

If you do opt for self-employment, you will be part of a growing trend. Government data shows that one in six of the UK labour force (4.8 million people) is now self-employed, compared with one in eight back in 2001. Much of this growth represents people working on their own or with a partner but without employees, and this micro-business group totals 4 million. While the growth has affected all age groups, it has been particularly marked among people aged 65 and over, who now number just under half a million. When it comes to earnings, in common with all ages, older self-employed people earn less if they work full-time than full-time employees. However, bucking the trend, part-time older businesspeople earn slightly more than their peers who are employees.

Government research has found that, for most people of all ages, the key motivation to becoming self-employed was not financial, but the lure of independence, flexibility and job satisfaction, with flexibility top of the list (mentioned by 46 per cent of the people surveyed). Most planned to remain self-employed until they retired. For the minority who intended to quit self-employment to become an employee, by far and away the most common reason was greater security. Three out of five self-employed had additional sources of income, such as a partner’s income, rental income or a pension, and the majority of this group said being self-employed was not essential. This reveals one of the big advantages of starting a business in later life. While the most common problems that younger business owners face tend to be financial – dealing with periods when earnings drop due to illness, having enough surplus to save for a pension and applying for a mortgage when earnings are variable and insecure – as an older entrepreneur, you are more likely to be past these issues and more free to take real pleasure in your business.

Taking stock

The range of business opportunities is limitless. Some of the areas you might be thinking of are:

• Consultancy work, selling specialist knowledge and skills built up over your career to a range of clients, who might include your former employer.
• Turning an existing hobby into a business, for example, carpentry, metalwork, sewing, jewellery-making or baking. This might entail selling things you make, holding workshops where you train others in these skills, or both.
• Selling skills you already have, such as gardening, catering, a handyperson service, teaching languages, tutoring or coaching, musical and performance arts, driving, housekeeping, care or companionship services.
• Acquiring new skills that you can sell, such as plumbing, web design or book-keeping.
• Running a location-based business, such as a café or shop.
• Starting a social enterprise, where the aim is not to make profit for yourself but to benefit your community – for example, giving debt advice, running an animal rescue centre or providing support for the homeless.

Different types of business require different levels of commitment from you and have different financial requirements. The sections that follow aim to get you thinking about how well you and your business idea marry up.

Time and flexibility

A major attraction of being your own boss is choosing when you work, and some types of business lend themselves well to this, for example arranging your own workshops and classes to teach a skill, building up a small clientele for regular gardening services, or taking on contracts that simply specify delivery deadlines. However, being able to flex your hours does not necessarily mean you can work short hours, and some businesses will struggle if you are too flexible. For example, if you run a shop or café where you rely on customers dropping in without an appointment or booking, you will rapidly lose custom if your business is only open at random and unpredictable times. Nobody will want to make the effort of travelling to your premises only to find you closed.

There are similar issues if you work as a consultant. Firms often use consultants and freelancers to deal with lumpy or unexpected workloads. As such, you will often be contracted to deliver your work to tight and possibly very short deadlines. This may mean burning the midnight oil to meet a deadline, even though once it’s done you can take time out. A further issue with consultancy is that much of your work may come from repeat contracts from happy clients or referrals because of the great job you did. Thus, while you’re building your reputation, turning down a job because you’d prefer some free time could mean that you lose not just that one contract but also repeat work from that client and others. Once you are established, this may be less of a problem. Similar issues may apply if you are building up a business such as catering for, or performing at, special events – if you say no, the customer is likely to move on and find an alternative, and you may also lose referrals as a result.

If you are selling things you make, you may need to schedule your workload around peaks and troughs in your market. Will your sales be bunched in the Christmas period or during the summer? If so, you will need to build up your stock ahead of these periods. How you sell can also create the rhythm for your work – if, say, you sell at a monthly craft fair, you will want your stock to be highest just before each sale. If, on the other hand, you sell mostly online, your sales might be more evenly spread and you might even be in the happy position of being able to make items to order.

Be aware too that there is a fair amount of admin that goes with running a business: keeping records of sales and everything you buy; drawing up accounts; dealing with tax; complying with regulations, such as waste disposal; and so on. You may be able to hire others to take on some of these tasks, though that has to be arranged and monitored too. In many areas, from catering to finance, there are additional regulations, and, if you provide professional services, you may have continuing professional development (CPD) requirements to comply with. These will all require time on top of what it takes to run your core busines...

Table of contents

• Cover
• The Good Retirement Guide 2020
• Titlepage
• Contents
• List of Tables
• 01 Are you looking forward to retirement?
• 02 Money and budgeting
• 03 Pensions
• 04 Tax
• 05 Investment
• 06 Your home
• 07 Leisure activities
• 08 Starting your own business
• 09 Looking for paid work
• 10 Voluntary work
• 11 Health
• 12 Holidays
• 13 Caring for elderly parents
• 14 No-one is immortal
• Index
• Copyright