Third age entrepreneurs

If an over-50 redundancy victim sets up in business, his or her chances of success are surprisingly bright.

Guy Tierney was 59 and beginning to plan for retirement from his job as a Norfolk estate agency manager, when out of the blue the company was taken over by a national chain and he was made redundant.
“After 27 years with the same firm, to say it was a shock was an understatement,” Guy says. “I suppose I had been winding down a bit mentally. Now suddenly I had no alternative but to wind up again.”
Bleak
As the UK redundancy rate has now reached 3,000 jobs every working day, over-50s like Guy Tierney are not surprisingly taking the brunt of it. Indeed, there’s no getting away from some rather bleak facts and figures. For instance, more than half a million over-50s are currently registered as out of work, with 43 per cent being considered as long-term unemployed.
Economists blame what they call the ‘over-50 syndrome’ on a combination of employer prejudice and the difficulties in relocating to where new jobs may be found - older workers tend to be tied down by mortgages and family commitments.
There can also be problems with age discrimination, despite employment laws that forbid this. Production manager Graham Bosley, made redundant last year, claims that on three occasions jobs he applied for - and was virtually promised - later went to younger men, although he had far more experience and qualifications.
“It’s very difficult to prove age discrimination and even harder to keep your chin up and keep smiling when it happens,” he says.
If you think you have suffered from age discrimination, have a look at the Age UK website, which has guidance for making a complaint.
But there’s good news, too. Despite the current economic gloom, if an over-50 redundancy victim sets up in business his or her chances of success are surprisingly bright. Indeed, a Warwick Business School study has found that the highest survival rates among start-up businesses are those whose founders are between 50 and 55.
“When I was younger I thought about striking out on my own, but never got around to it. Now it seemed I didn’t have much alternative,” Guy Tierney says. “I got a redundancy payout, but even if I invested it, it was not going to be enough to support the standard of living my wife and I enjoyed. I had good health, good professional qualifications and lots of contacts, so I decided to become a consultant surveyor.”
That was two years ago. Financed by his redundancy money for the first six months, Guy’s home business is now grossing nearly £80,000 a year. “Going to work is a pleasure I haven’t had for years,” he says.        
He’s not alone. According to the latest surveys, an increasing number of middle aged people feel they can take on a new challenge at a time when their parents were beginning to contemplate a peaceful retirement. As a result, many older people faced with redundancy take the plunge and work out a completely new career plan.

“This can be costly, but there is often help available - some redundancy packages even include a separate payment to go towards a retraining course or qualification,” says Bristol start-up consultant Ian Kendrick.
Grants or bursaries may also be available - bursaries are similar to grants, but are usually linked to a specific career qualification, like teacher training - and other educational help is available through the Education Grants Service and Family Action.
In fact, there’s no shortage of help and advice available for someone of mature years wanting to go it alone. For instance, the National Careers Service offers free help over the phone or face to face. There’s also a government scheme called New Deal 50 Plus that offers help and advice. To qualify you must have claimed Job Seeker’s Allowance or pension credit for more than six months.
The government has now scrapped the 50-plus allowance of Working Tax Credit designed to top up your wages when you restart work. It’s been replaced by something called the Flexible New Deal - and you could be eligible for this.
Other sources of help and advice include organisations like the Third Age Employment Network and The Age & Employment Network, a network of 200 organisations and groups that represents the leading UK expertise in helping people aged 50-plus overcome discrimination and realise their aims and ambitions.
Consultancy
Studies show that over 30 per cent of over-50 redundancy victims consider consultancy work. After all, as Ian Kendrick says: “If you have years of experience under your belt in a particular field, working for firms on a consultancy basis can be a nice earner. Networking is crucial to getting consultancy work, so make sure you keep in touch with the contacts made during the course of your career. 
“In fact, networking is invariably the key to getting a job if you’re over 50. Studies have shown that well over 50 per cent of post-redundancy jobs are found through word of mouth and personal connections.”
Get in touch with your local chamber of commerce to join up with local networking events and find out from Business Link what networking groups are in your area. As Ian Kendrick says: “Make sure you have a business card handy and a friendly attitude. Who knows what a chance meeting can lead to?”
If you are intending to open a ‘third age’ business after being made redundant, but already have a private pension, it makes good sense to talk over the project with an accountant or financial adviser and do some serious tax planning. Otherwise you could be in for a shock.
“The tax system can suddenly become quite penal for people who have pensions as well as other income,” says small business tax adviser Kelvin Moody.
There are further complications if a third age businessman or woman has an occupational pension. “If you start a new business and complete a self assessment tax return, chances are the Inland Revenue will adjust your coding and allowances so that you will pay the extra tax from your occupational pension,” says tax accountant Alan Sinden.
But for many third age entrepreneurs, the stimulation of a new challenge outweighs all these problems. For instance, when technology company executive Alan Barrell was made redundant at 57 he had no intention of spending his days on the golf course or getting under his wife’s feet. Instead he co-founded Cambridge Gateway Fund, a venture capital investment business with £35 million capital and today is also in demand as a visiting professor at universities and entrepreneurship centres.  
Another heartening success story is that of redundant stockbroker Raymond Francis, who left the City in 2009 aged 57 and set up a Surrey garden design business with his redundancy payout. Three years later, the firm has 20 employees and an annual £4 million turnover.
Secure
“I liked the idea of turning a hobby into a business,” Raymond says. “The City is a young man’s world and as soon as recession looms on the horizon the future gets shaky for the older guys. By working for myself I feel more secure and in control than I ever did when working for someone else.”  
No one can deny that picking up the pieces after a middle age redundancy can be traumatic and consultants report that many potential third age businessmen and women are, it seems, defeated before they start - even though statistics show that over 70 per cent of third age businesses are still going five years after they started.
They’re worried they’re too old to try something new, doubtful they could cope with the latest technology and fearful they haven’t the necessary drive and determination.
“I know all those feelings,” says Raymond. “But if you come up with what you think is a really good business idea, you’ll never forgive yourself if you don’t give it a go.”