Many small business owners cannot afford to retire
Posted: Wednesday, January 15th, 2025
New research from Direct Line business insurance reveals that one in seven (14%) small business owners and sole traders will continue running their business as a side hustle as they draw their pension because they can’t afford to retire.
It is estimated that over 740,000 side-hustling pensioners must work to supplement their retirement income.
With London being one of the most expensive cities to live in the UK, it is perhaps not surprising that almost one in five (18%) small business owners and sole traders in Greater London say they must work to supplement their pension when they reach retirement age.
Building up a company takes hard work and dedication, with business owners experiencing varying degrees of success, which will undoubtedly influence retirement plans.
Many (20%) small business owners and sole traders are still undecided on what to do with their company when they retire.
A fifth (22%) plan to fold their business upon retirement, and a similar proportion (21%) plan to sell the firm to either a third party, employees or a friend. One in six (17%) say they hope to hand their business over to a family member to run when they retire.
What small business owners and sole traders plan to do with their business when they retire?
|
Plans for the business |
Percentage |
|
Fold/ rundown the business |
22 per cent |
|
Sell the business to a third party, employee or friend |
21 per cent |
|
Unsure |
20 per cent |
|
I can't afford to retire so that I will continue the business as a side hustle |
14 per cent |
|
Pass on to a family member to run (I think they will want to run it) |
10 per cent |
|
Pass on to a family member to run (but I don't think they will want to) |
7 per cent |
|
Give away the business to a friend or employees |
5 per cent |
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