The UK’s thousands of unemployed over 50s who are keen to work should be encouraged into setting up their own business, experts have claimed.

According to PRIME, a charity which promotes entrepreneurship among older people, some 800,000 individuals between 50 and state pension age are currently inactive but want to work. One solution, it said, is self-employment.

Research by the group showed that contrary to popular belief, most new businesses are established by entrepreneurs in their 40s and 50s and with the UK’s increasingly aging population, the number of younger people going into business is set to decline.

As a result, PRIME said ministers should refocus their efforts on creating effective structures which help older people to develop their own ventures.

Too many enterprise initiatives, the report noted, target young people only. The Treasury funded Economic Insight campaign for example specifically precludes investment in the encouragement of older entrepreneurs, while the government’s Phoenix Fund, which underwrites loans from banks for new firms, is not available for the over 50s.

The study claimed that as well as boosting the UK’s enterprise spirit, an increase in the number of older entrepreneurs would save the government £7,000 per person in welfare payments.

“Not enough is being done to reduce worklessness among the over 50s,” said PRIME’s chief executive Laurie South. “Despite an increase in the number in work, the number not working is actually growing – and will continue to grow as the UK’s population ages. So effective government action is sorely needed. Self-employment remains the best option for many of the 800,000 individuals eager to work.”