Pensions for business owners

If you are a business owner, pensions are still one of the most tax-efficient ways to save for your retirement. You receive tax relief at your highest rates and if your company pays the pension premium for you, their pension contributions on your behalf do not attract employer or employee National Insurance, unlike your salary.

Just like other employees, as a business owner you should use your occupational pension arrangements to ensure that your personal affairs are structured as tax efficiently as possible. We can assist you with this. For example, a small self-administered pension scheme (SSAS) could allow your company to invest in many areas, including commercial property, in order to build a substantial portfolio of investments.

We have experts ready to talk to you regarding business plans for company and business owners

Under pension legislation that came into force in April 2001, the maximum allowable contribution to defined contribution pension schemes, other than occupational schemes, can be based on the tax year in which you were not a member of an occupational pension scheme with the highest earned income (subject to the earnings cap) in the last five tax years. This applies to self-invested personal pension schemes (SIPPs), personal pensions and stakeholder plans. It means that if your income is made up of dividends and salary or bonuses, you need only one high salary year in five to maintain a high level of pension investment. Why not talk to us about this?

Types of pensions available form company owners

Occupational Pension
This is a company pension provided by an employer. The benefit you receive on retirement may be linked to your earnings (defined benefit) or how much money you have put in and annuity rates at the time (defined contribution).

Personal Pension
These are defined contribution schemes where your final pension depends on the fund built up during the course of your working life and also the prevailing annuity rates at the time of your retirement.

Self-Invested Personal Pensions
Known as SIPPs, these pensions enable you to make your own investment choices, which could include buying a commercial property to use as offices and then renting it back to your employer.

Small Self-Administered Scheme
This is a special type of occupational pension, with a maximum of 11 members allowed to be a part of the scheme. You have options available that would not be possible with an ordinary occupational pension scheme, such as making a loan to your own business or investing in your company’s premises.

Executive Pension Plan
An occupational pension scheme that allows you to take advantage of making larger contributions than to a personal pension scheme or SIPP, making it suitable for senior staff and higher income earners.When was the last time you reviewed your pension arrangements? And do you know what level of income your pension is likely to provide you with? We can give you an informed independent review of your current situation.

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