Becoming self-employed if you are over 50

The decision to become self-employed is a big step, especially if you're close to retirement. Plenty of advice is available and you can get help with planning, training courses and funding.

What are the options?

There are different ways of being self-employed:

• as a sole trader, working alone: the simplest option
• in a partnership: with two or more people
• as a limited company where: the business has a separate identity (you will need help to set this up)
• a franchise: an agreement that allows the franchise buyer the right to run a branch of a business that someone else has set up
• nibusinessinfo website

The challenges

If you run your own business:

• there is no holiday or sick pay, no pension and no regular income
• there is every chance that you will have to work longer, irregular hours and sometimes weekends
• you will also have to submit your own tax accounts
• Understanding your Self Assessment Statement (money, tax and benefits section)

The benefits

Advantages of being self-employed include:

• not having to work for somebody else
• self-fulfilment, making full use of your experience, talents and abilities
• financial independence and flexible working hours

First steps to self-employment

Before you become self-employed, you will have to research and develop your business idea.

Then you must prepare a business plan that reflects what you need to do to set up and run the business.

• Self-employment checklist - Citizens Advice Bureau website
• Starting up - nibusinessinfo website

Funding and grant schemes available for over-50s

You may be able to get money from grants from charities or trusts or loans from banks and building societies.

• Starting up - nibusinessinfo website

Training courses

Nibusiness info offers advice on training for those considering starting up in business. The Careers Advice Service also offers advice on self-employment.

• Starting up - nibusinessinfo website
• Training (education, learning and skills section)

Advice and support

The nibusinessinfo website is a good source of information and advice. You can call the nibusinessinfo helpline on:

• 0800 181 4422

The Citizens Advice Bureau has an advice section for the self-employed.

• Self-employment advice from Citizens Advice Bureau
• The cost of contacting 03 and 08 telephone numbers (contacts section)

Financial and tax implications what are they?

You will need enough money to live on while you start up the business, plus funding for start-up costs. You will also be responsible for paying your own tax and National Insurance.

You may choose to have an accountant or alternatively you can submit a self-assessment tax return online.

If you are starting up a new business through New Deal, you get the same benefits as you got before. You might also be eligible for a top up.

If you find work through New Deal, there are different benefits on offer, including tax credits, to make sure you're better off in a job than on benefits.

• Self-assessment - your tax return (money, tax and benefits section)

Working after State Pension age

You will have to pay tax on your State Pension if you are still in paid work when you receive it. For more information, contact your local pension office.

• State Pension