For more than a decade, the world’s preoccupation with entrepreneurialism the over-50s are playing an increasingly important role in the economic growth of the UK. Rather than being a burden on society, this age group is outstripping its younger counterparts on a number of fronts – from spending, job creation and contribution to GDP – which is having a significant impact on the UK’s economic prosperity.
A report by Hitachi Capital UK and Centre for Economic and Business Research (CEBR) reveals that the older generation spent more than the under-50s for the first time in the year ending April 2016, with a total £376 billion of discretionary spending.
Analysis of the economic impact of this ‘silver pound’ showed that it translated to a contribution of £119 billion to the UK economy (over 6 per cent of total UK GDP in 2016), supporting an estimated 1.9 million jobs.
The over-50s’ contribution was found to be growing at a much faster rate than that of the younger age bracket. While spending by the under-50s has grown just 1.4 per cent per year since 2003, spending by the over-50s over the same period has grown more than three times as fast at 4.6 per cent per year.
Driven by increasing life expectancy, the number of over-50s living in the UK has increased substantially over the past 15 years to 23.6 million in 2015, a figure that is set to keep rising. The report showed that the economic contribution of this group is expected to grow by 57 per cent over the next ten years.
The study also found that, as with spending, employment by the over-50s had grown significantly faster – another trend that’s set to continue.
“Our research challenges negative preconceptions about the over-50s – both in our industry and in society in general. Not only have we shown that this group is now the dominant force in the UK economy, but also that their contribution across jobs, spending and wealth creation is growing at a considerably faster rate than the under-50s’. We are now seeing the over 50’s setting up and running their own businesses at a faster rate than any other age group, directly employing nearly 10 million people, 2 million more than the under 50’s,” says Robert Gordon, CEO of Hitachi Capital UK.
“It is time to stop being negative about the older generation. Instead of writing them off, we must become more effective at realising the economic ambitions of this growing section of the population.”
Over-50s and entrepreneurialism
Sometimes referred to as ‘olderpreneurs’, entrepreneurs over 50 are also outpacing younger age groups on job creation. Labour Force Survey data shows that over-50s currently make up 45 per cent of the UK self-employed workforce, and that the employers among them accounted for nearly 10 million jobs in 2016 – almost 2 million more than the under-50s.
According to internal data from the government-backed Start Up Loans Company, over 600 people, aged over 50, have set up their own company in 2016. The initiative’s lead business financial advisor, Elsa Caleb, outlines the major business trends among this generation of industrious business owners.
The generational divide is no more
If you think starting a new business is a young person’s game, think again. Britain’s over 50s have actually passed the 18 to 24s age group, who have accounted for a 100 less newly established businesses. These latest stats have changed the business landscape and reinstate the fact that you’re never too old to follow your ambitions.
What does past-employment mean for start-up dreams?
There’s a common misconception that businesses are only set-up by existing business directors or with the help of multi-million pound corporations, but actually that’s not the case. A lot of new business owners have been previously unemployed, which gives hope to the everyday man or woman, who may not have several years experience as a company CEO or a business degree.
In terms of the numbers, the Start Up Loans Company’s data have revealed that 42 per cent of new over-50 business owners were previously unemployed, 35 per cent were already self-employed and 20 per cent left a full or part-time job.
Regionally, the UK’s most ambitious over 50s are most prevalent in London, the South East and South West.
Starting your own business: four key tips from the experts
Know your industry inside out
It’s essential to know all aspects of your industry or chosen field; you’ve got to be an expert. A great idea is important, but you’ve got to have that industry knowledge to back it up.
It’s best to do your research before setting up your company by reading books, blogs and watching talks with key industry figures. Social media is another excellent research tool. For instance, you may choose to follow your favourite fashion designers on Twitter, or connect with other business owners on LinkedIn.
Decide which business funding method is right for you
There are now so many simple and efficient ways to fund a business, such as grants, crowdfunding, and Start Up Loans. Each method has its benefits and perks, it’s simply a matter of finding out which one works best for you. For instance, if you’re planning to set up a niche business, you may find that there are government grants available.
Seek mentoring from existing business owners in your industry
Many of the world’s most successful businesspeople wouldn’t be where they are today without a guiding hand from a mentor. A mentor can provide a wealth of useful knowledge and expertise to help you get your business off the ground. Another thing to remember is that your mentor can be absolutely anyone with relevant experience. A friend, a family member or a person you’ve always admired.
Preparation and planning are key to success
When it comes to business, planning is essential. As a business owner, you’ve got to be able to think ahead and look at the bigger picture. Careful planning should feature in everything you do, whether it’s drafting your cash flow forecast or preparing for an online Christmas campaign. One of the best ways of staying organised and ahead of schedule is to keep diaries and calendars with notes of key dates and important events i.e. networking sessions and business seminars.