Dear George - interesting question - I was in this position 3 years ago and when I became redundant I signed on and started looking for a job. I found that at the age of 52 despite years of valuable experience and qualifications that no-one was interested in replying or giving me an interview - and to be honest looking back I don't think that my heart was in it 100%. Anyway, after a couple of months of this I started to think about self-employment and I was in the right place at the right time because I went to the local Business Gateway here in Scotland and was informed about a course that was being run for setting up your own business - I applied at the job centre and was fortunate enough to get on it. So I set up my business and attended this course at the same time and I have to say I've never looked back - I'm still going strong even though it is challenging because business doesn't just come through the door you have to go out and chase it and be prepared to change and adapt to bring in business and you always have your business head on, no more 9-5 mentality - however, I wouldn't go back to being employed. I think you have to decide what you really want to do and then put 100% of your energy into it.
Not an easy decision but good luck either way.