According to data from the Office of National Statistics, post-pandemic labour non-participation rates are now rising in the UK after having fallen continuously since 2007. More than 1.3 million people are leaving their jobs this year and moving on to new opportunities. While many are slipping into retirement, others are looking to buy businesses, leading to a flurry of interest for business brokers.
Why Are Over-50s Buying Businesses?
Since 2000, interest in business buying has been most rampant among the over 50s. This group, who are finding it challenging to get full-time work in the conventional corporate economy, is branching out and looking for new opportunities. “Oldpreneurs” are starting businesses that don’t age discriminate and give them the opportunity to embark on a second career for as long as they feel fit and healthy.
New pension freedoms are also making their impact felt. Many older employees can access their retirement funds without penalties from age 55 onwards, allowing them to get hold of lump sums they can then invest in businesses. Often, they have enough seed capital available to make an initial purchase before attracting additional VC money to expand.
Some of the 800,000 over-50s who left the labour force last year are also using redundancy pay to launch firms. Many are investing in the types of businesses they wanted to start when they were younger but couldn’t because of the demands of traditional employment. Consultancies, recruitment agencies, and even ice cream shops are all popular choices for business buyers in the Yorkshire area.
For others, buying a business is a matter of economic necessity. Figures show that around half of all jobs created since the 2008 financial crisis were self-employed. And while these arrangements gave workers more freedom, they also reduced their take-home pay by around £60 per week. Now, many older workers simply don’t have the nest egg they need to retire, so continuing to work is a necessity.
Unemployment is also a problem. Official figures suggest that there are 2.9 million people between the ages of 50 and 68 in the UK who aren’t in regular work. But when Age UK surveyed these individuals, they found that only 700,000 of them considered themselves “retired.” The remainder wanted to find work again but often couldn’t. The number of unemployed women over the age of 50 increased by more than 50 percent at the start of the last decade, while the overall unemployment rate only rose by 1 percent.
New Business, New Opportunities
There are also problems endemic in some of the UK’s most dynamic sectors. Take the City of London, for instance. In the past, it attracted workers from across the age spectrum, combining the crystallised intelligence of seniors with the youthful exuberance of juniors. Now though, most people who work in the square mile full-time are under the age of 50 (and capable of putting in 60-hour weeks for the big firms).
Despite all this, the proportion of self-employed over-50s working in finance and business services is high. These professionals work the same hours as regular employees but they aren’t on the company payroll. Many either operate their own firms or buy consultancies previously run by others, using their expertise to take up the reins.
You can understand why this trend is playing out. When an older business leader becomes their own boss, hiring bias disappears. Purchasing companies frees them up and lets them extend their careers longer than mainstream corporations would allow. Owners can operate a company at any age and take on employees without the risk of being “let go” and replaced by younger candidates.
Established firms often regularly seek the advice of industry veterans, even if they would prefer to keep them off the payroll for strictly economic reasons. The growth of independent financial consultants in and around London is a testament to this. Older people have considerable expertise and experience that firms can’t acquire from the conventional labour market.
It would be wrong to assume that this trend is playing out exclusively in either London or finance. It’s also happening in Yorkshire and all over the UK. Large firms want to hire younger people, but they also want veterans to lend them a helping hand when they get stuck. Equally using their skills in more traditional business sectors is a boom area. And that’s what’s assisting acquirers and leading to a lot more business sales.
Get Help Buying Or Selling A Business
If you’re planning on buying or selling a business in the Yorkshire area, get in touch. Our partner Philip Drazen provides help across this area and ensures that you are well supported throughout either a buying or selling process. And why not sign up to our monthly newsletter for the latest sales on the market.