Director Pension Planning

It’s very easy as a company director to make sure your staff have pensions and everyone is well looked after. But what about you, the boss?! What are you going to live on when you retire?

You might say – ah, the business and its sale, is my pension. But it is not that simple. You don’t know how your business will fare between now and your planned retirement date and, even if it does thrive, without you the business might not be so attractive to buyers and where does your income in retirement come from?

So it’s a good idea to consider a director’s pension as a means to make sure you have a comfortable retirement. Having such a pension is a very tax-efficient way of using business profits for your benefit. Contributions paid by the company into the Director’s pension scheme are a fully deductible business expense and thus qualify for corporation tax-relief, and any personal contributions could also qualify for income tax-relief.

Depending on which type of pension vehicle is used, the pension can even invest in a business property.

There are different types of pensions available; for example, a personal pension, Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS), and decisions to be taken about whether you personally pay in or just the company. There is a lot to think about and it is wise to take advice, which is where our experienced wealth management team comes in.

Please contact us if you would like to know more.