Many small business owners setting up their firms after the age of 50 may not be reaping the full benefits of their hard work, according to Third Age Entrepreneurs.

The Barclays research-based review found 35 per cent of these business owners plan to close the firm down when they retire, possibly reflecting a lack of awareness of their business's potential worth if they decided to sell.

Alistair Camp, managing director of Barclays Small Business Banking, said: "Many small business owners may not be aware that even if their business has no tangible assets, the firm could have built up commercial value in the form of goodwill.

"I would therefore urge any business owner who is thinking of closing their business to consider whether it can be passed or sold on.

After all, an unexpected cash bonus could come in useful for retirement. Why not reap the benefits of all those years of hard work?"

Four-out-of-ten third-age owners set up their businesses over ten years ago, and for these owners there is another bonus. If they do sell it will be Capital Gains Tax exempt.

Furthermore, with over a quarter (26 per cent) of this group currently turning over £50,000 per annum, the potential income they would receive from the sale of their business could be significant.

Meanwhile, Barclays Bank is to take a £116 million hit this year to settle a five-year-old legal dispute.

The cash will be paid to the administrators of British and Commonwealth Holdings, which collapsed after the acquisition of Atlantic Computers in 1988.

B&C initially claimed £500 million in damages alleging Barclays' investment banking arm Barclays de Zoete Wedd had failed in its duty as an adviser on the acquisition.

Atlantic Computers collapsed in April 1990 and was followed in June by B&C itself.

B&C's administrators issued legal proceeding against Barclays in 1994.

Barclays said the final settlement of £116 million was partly covered by around £40 million in insurance cover.

But the company admitted that its recent profit forecast for 1998, in which it said pre-tax profits would be at least £1.9 billion, did not include any provision for the legal settlement.

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