Curious question, but perhaps someone is in the know. Borrowing against a pension

Workerdrone

Ok, so Im 49 ( 50 in Jan), no mortgage. 45k salary, wife earns 56k, 67k in savings. 385k in pension.

I'm totally uninspired by work. I need a new challenge, but I do love to cook. Ive seen a local cafe for sale.

https://www.mikerogerson.co.uk/commercial/property/12622885-29-newgate-street-morpeth

Im probably just spitballing, I could of course just get a business loan or self finance.

Im just interested in anyone take on chucking in the towel 5-10 years before retirement and doing something you fancy instead.

Absolutely no idea on running a business in 2025, but I am (as are many on here) very focussed on costs and expenditure (I think thats a good thing

Hoping for some advice.

MyRealNameToo

You can't borrow using a pension as security in the UK, it's treated as though it were an unorthorised drawdown from the pension so significant tax implications.  Unfortunately a lot of things work differently in the US and people assume an article in English is talking about the UK but thats not the case. 

So invest savings and/or get loans, for the later you will need a business plan and to be contributing your own money too... It will be questionable on if you should buy the business or just the assets of the business but that depends what value you place on what they have and what setup costs it would save you -v- setting something up from scratch rather than buying a going concern. 

flaneurs_lobster

Comments about borrowing against a future pension?

Or thoughts about running a cafe (or maybe a fine dining restaurant)?

No-one here can give advice but with the little insight you've given into your finances, I'm thinking your pension provision looks rather light for two people on your earnings at your age. 

Brie

flaneurs_lobster said:

Comments about borrowing against a future pension?

Or thoughts about running a cafe (or maybe a fine dining restaurant)?

No-one here can give advice but with the little insight you've given into your finances, I'm thinking your pension provision looks rather light for two people on your earnings at your age. 

Hopefully the wife has her own pension that isn't being touched by this so they'll have that as well?

My concern would be if the pension was able to be accessed at some point (maybe at 57) for this sort of thing and the OP runs the cafe happily for a few years, maybe making a decent income and is happy to be working still.  But comes a time for retirement and then they've only the wife's pension to live on.  

Marcon

Workerdrone said:

Ok, so Im 49 ( 50 in Jan), no mortgage. 45k salary, wife earns 56k, 67k in savings. 385k in pension.

I'm totally uninspired by work. I need a new challenge, but I do love to cook. Ive seen a local cafe for sale.

https://www.mikerogerson.co.uk/commercial/property/12622885-29-newgate-street-morpeth

Im probably just spitballing, I could of course just get a business loan or self finance.

Im just interested in anyone take on chucking in the towel 5-10 years before retirement and doing something you fancy instead.

Absolutely no idea on running a business in 2025, but I am (as are many on here) very focussed on costs and expenditure (I think thats a good thing

Hoping for some advice.

What due diligence have you done on the café as a business proposition?

Albermarle

Suggest you research the success rates of new ventures in the cafe/restaurant trade.

Eldi_Dos

@Workerdrone
Suggest you get EA to take down photos and owners remove the infant highchairs from the toilet area, seeing that would make me think twice about other hygiene practices.

Nebulous2

Very little to offer on the financing, but a slightly off-field comment. 

I had a friend who was a moderately well-paid accountant. She had an ambition to leave and open a cafe / cake shop. She spent months looking at property / leases / purchases / budgets / costs. 

Eventually, and fairly reluctantly, she dropped the idea. She came to the conclusion she couldn't come anywhere close to her current earnings running a cafe. She said the only way she could make it work was keeping on her own job, doing the finances and budgets, and paying a manager to do it for her. As wanting to run her own cafe was the motivation for the whole project she gave up.

I don't think much has changed in the intervening years. If anything the competition is more intense, with a lot more big chains filling that space. 

HedgehogRulez

Just think about how many cakes you’d have to sell a month to pay for all the expenses there is in running a cake shop. 

Cus

Workerdrone said:

Ok, so Im 49 ( 50 in Jan), no mortgage. 45k salary, wife earns 56k, 67k in savings. 385k in pension.

I'm totally uninspired by work. I need a new challenge, but I do love to cook. Ive seen a local cafe for sale.

https://www.mikerogerson.co.uk/commercial/property/12622885-29-newgate-street-morpeth

Im probably just spitballing, I could of course just get a business loan or self finance.

Im just interested in anyone take on chucking in the towel 5-10 years before retirement and doing something you fancy instead.

Absolutely no idea on running a business in 2025, but I am (as are many on here) very focussed on costs and expenditure (I think thats a good thing

Hoping for some advice.

I had a boss years ago do that.  He eventually went back to work in the city, too much stress running his own cafe, losing money didn't help that stress either.

You also can't use a pension as collateral.

But don't give up the thought that there is something better out there for you, to challenge you etc.  

Edit: maybe some cooking on the side, helping out somewhere, small home deliveries, keep the main job, build up contacts, explore how that develops etc etc

GDB2222

I knew of someone who ran pop-up fine dining evenings. He would take a day off his main job to do the prep and cook. That might add some zest to your life.

I find it weird how the estate agent simply brushes aside the cost of the lease, as a small detail to be looked at later.