According to the Office of National Statistics (ONS), the average person has £107,500 in their pension pot by the time they reach the state retirement age of 65. Given we’re living longer and could enjoy a retirement lasting several decades, it’s little wonder so many people keep working to supplement their pension income.

That said, many others have saved enough to retire comfortably and choose to continue working for other reasons. They may want to maintain their pension savings for as long as possible to pay for their later years, or they might be planning to leave an inheritance for their children and grandchildren.

Whatever their reasons, according to the ONS, almost 1.5 million or 11.5% of people over the age of 65 are still working – the highest levels on record.

Your pension can give you a lump sum if you need capital to start your business. You can access 25% (capped at £268,275 in the 2023 spring budget) of your pension pot completely tax-free when you reach 55 (this rises to 57 in 2028). But before you take money from your pension, it’s important to seek advice from a financial planner. You must ensure you have enough savings to maintain your lifestyle for the decades ahead, and don’t inadvertently create any tax liabilities.

While some people’s retirement dreams feature luxury cruises, more time on the golf course, or quality time with loved ones, others dream of finally having the chance to run their own business. Family commitments and monthly outgoings might have previously made that too much of a financial risk. But once your mortgage is paid off, your children have left home, and full-time work has ended, your retirement could be the right time to make that dream a reality.

Remaining in work or starting a business venture is a great way of staying mentally agile, relevant, and connected to the broader world. You might not be planning world domination, but having that day-to-day stimulation and purpose could be the key to an enjoyable, fulfilling retirement.

Your pension is your reward for a lifetime of hard work, but make sure any amounts you take from it are well-considered. You don’t want to sacrifice financial stability further down the road.

The simple fact is that ‘start-ups’ are risky. Be realistic about your chances of success and have a back-up plan in case it doesn’t work out. Pension funds are much harder to rebuild as you get older, so make sure you leave enough to sustain yourself for the rest of your life. A qualified financial adviser will be able to help you assess the risks and crunch the numbers.

When you’re self-employed, you’re responsible for declaring your income and paying the appropriate personal and business taxes. You will also need to file accounts annually, if you’re a Limited company.

You might choose to do this all yourself if your business is relatively small and straightforward. But if you’re new to running a business, or simply don’t have the time, you may find it easier to hire an accountant to manage this for you. Bear in mind that you’re likely to have multiple forms of income to consider when calculating your tax liabilities (for example, your pension income will be included in this calculation).

Although not a financial consideration, it is worth thinking about the impact starting a business will have on those around you – especially your spouse or partner. Consider how much of your time you will need to commit to the business and how that fits in with your shared vision of retirement.

It’s vital to talk about what you want to do and the support they are willing to give you. Set boundaries and agree on a work pattern that suits you and your family.

You’ll have built up incredible knowledge and a robust set of skills over your working life. Your contact book might be bursting with potential new customers and partners. But you need to recognise the gaps in your knowledge that could be critical to your success, such as e-commerce processes or social media marketing.

You can access a lot of support, information and training, but you may find it’s more efficient to employ an agency or consultant to help you. This will obviously eat into your capital or potential income. So, before you embark on a start-up, think carefully about the money you will need to get up and running, and sustain your business until you start turning a profit.

Life doesn’t always go to plan. You may be affected by a flood, you could suffer a broadband outage that disrupts online sales, or your key staff might fall ill and be unable to work. A business continuity plan is therefore vital for any business, small or large.

If your business is totally reliant on you, your continuity plan should cover what would happen if you can’t work. The reality is that as you get older, there’s a greater chance you may suffer from ill health. With the right plans in place, you’ll give your business the best chance of remaining successful even if something goes wrong.