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

JoeCrystal

And don;t forget about all the fixed costs of the businesses as well, if you think customer utilities prices are bad? You should see what the business utilities' prices are, and of course, the business rates and all other regulations you have to follow. 

LHW99

I think you will fin that the costs of actually keeping the place running, including insurances etc means you have to have a significant income coming in just to cover, then you have to generate the extra for paying yourself, other staff (you can't be cook, waiter and washer-up all at the same time), plus covering breakages, non-paying customers....

strawb_shortcake

There is a cafe local to us that have broken their lease early, multiple reasons for sale but much of it is finances and work life balance. It's said they have a turnover of £650k and just can't make it work. To do so they'd need to put their prices up to a level that just isn't sustainable to keep their customers. The business is up for sale too, but no idea how much for. It's a real shame as it's really popular.

Another has had to reduce staff to stay open so I think it's really tough for many in hospitality 

kimwp

At my office, there's someone who brings in cooked pre-ordered lunches from a menu (Thai food, with only one option per day, but the dish on offer is different each day), I've also seen people selling sandwiches out of their cars/vans. if I was going to venture into the food business, that's the way I'd go, maybe allow people to order bigger portions or puddings, cakes etc to pick up while you are delivering the lunches, to take home/. Office celebration etc - that should keep it interesting. 

If you do this, please consider reusable containers.

QrizB

There's a country pub not far from me where the freehold belongs to one of the smaller chains. The chain leases the property to whoever wants to run it.

Every couple of years the pub changes landlords, and a new middle-aged couple move in to great fanfare.

Then they realise the financial realities of running a pub, the initial discount on the lease expires, their pension lump sums run out, and they give up the lease.

Rinse and repeat with a new middle-aged couple.

ali_bear

Giving up a well-paid job to do something you love doing is all very well, but it only comes after you've achieved financial security for life. Sorry to say it but you may have a way to go yet. 

And don't you know that all hospitality businesses are really struggling now? In the immortal words of Mr Tony Soprano, forgeddabahdit 

MeteredOut

QrizB said:

There's a country pub not far from me where the freehold belongs to one of the smaller chains. The chain leases the property to whoever wants to run it.

Every couple of years the pub changes landlords, and a new middle-aged couple move in to great fanfare.

Then they realise the financial realities of running a pub, the initial discount on the lease expires, their pension lump sums run out, and they give up the lease.

Rinse and repeat with a new middle-aged couple.

Does Alex Polizzi ever drop by?

SVaz

I imagine you would need a turnover in the realms of vat registration and all the aggro that goes with it, to make any kind of go of it.   What does the cafe make now?
How many staff do they employ?   Could you handle the responsibilities of being an employer - like payroll and *having* to offer a pension?

I’m a self employed sole trader,  I took the plunge, leaving a well paid but stressful career as an engineering manager at 56.
I only employ my Wife, as admin,  luckily she knows what she’s doing regarding tax / payroll and all that jazz.
Don’t underestimate running costs of a business, mine were £13k last year and I don’t have premises, only a van.
You would need at least £5million+ Public Liability insurance for starters. 

Then there’s property insurance and rates, don’t forget gas safety checks every year and pat testing of electricals.   Commercial anything always costs more.   

Finally there’s the oncoming spectre of Making Tax digital ( already exists for Vat registered businesses)  which means Quarterly returns plus the main one. 

If all of that doesn’t faze you then great, good luck. 

dunstonh

QrizB said:

There's a country pub not far from me where the freehold belongs to one of the smaller chains. The chain leases the property to whoever wants to run it.

Every couple of years the pub changes landlords, and a new middle-aged couple move in to great fanfare.

Then they realise the financial realities of running a pub, the initial discount on the lease expires, their pension lump sums run out, and they give up the lease.

Rinse and repeat with a new middle-aged couple.

There is a pub a few miles away from us that is similar except it seems to be 12 months or less.   A certain national landlord owns it, and it goes through a cycle of a cheap initial lease attracting a happy landlord with lots of vision, but the lease and alcohol, which they are forced to buy via the landlord, rise until they are unaffordable, and they give up the lease.  Even if the pub is busy and doing well, a tenant publican is never going to be able to succeed and you just get poor mugs being suckered in with a dream.

Grumpy_chap

It is not possible to borrow against pension.

There are some circumstances where a pension can be used to purchase a freehold business premises which is them leased to the operating business.  It is a specialist area and would require particular advice.  The cafe the OP has linked an interest to is not for sale freehold so that does not seem to apply here in any case.

The OP and partner have income around £100k per year so the pension provision of around £400k seems inadequate to fund the retirement lifestyle that the OP may well aspire to.  Whatever the OP choses with regard to ongoing employment or an alternative venture like the cafe, some consideration to making adequate provision for retirement funding needs to be in the plan.