740,000 side hustling pensioners
Posted by: electime 13th January 2025
- An estimated 740,000 small business owners and sole traders may be unable to afford to fully retire
- One in seven (14 per cent) small business owners and sole traders say they can’t afford to retire and will run their business as a side hustle when they start drawing their pension
- Small business owners and sole traders in Greater London are most likely to need to work past-retirement age
New research from Direct Line business insurance reveals one in seven (14 per cent) 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 over 740,0001 side hustling pensioners will need to 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 per cent) small business owners and sole traders in Greater London say they will need to 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 no doubt influence retirement plans. Many (20 per cent) small business owners and sole traders are still undecided on what to do with their company when they retire. A fifth (22 per cent) plan to fold their business upon retirement and a similar proportion (21 per cent) plan to sell the firm to either a third party, employees or a friend. A further one in six (17 per cent) say they hope to hand their business over to a family member to run when they retire.
Table 1 – 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 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 |
Alison Traboulsi, SME Product Manager at Direct Line Business insurance commented:
“Being a sole trader or running a business is hard graft. Business owners need to juggle numerous responsibilities day-to-day, but it’s also important to plan for the future. Working beyond the state pension age can of course have several financial benefits. If you are fit and enjoy your work it can help keep you mentally stimulated and give you a sense of purpose in retirement. However, that’s not always the case and if the work is physically and mentally demanding, the need to work post-retirement age could easily become a challenge.”
