Pension contribution for business owners

Many business owners understand that making regular pension contributions is essential for a comfortable retirement. However, they often find it challenging to determine the best approach.

Some business owners delay contributing to their pension because they believe it must be done on a monthly basis, which can be difficult due to the cash flow dynamics of running a small business.

❌ The reality is that you don't need to make a significant monthly payment into a pension if it doesn't suit your situation.

✅ You can opt for a small monthly contribution and then 'top up' your pension at the end of the tax year with any surplus cash you may have.

Alternatively, you can choose not to make a regular contribution and instead make a one-off payment once a year.

For instance, I recently took on a new client who is a plumber with fluctuating cash flow. He needs to manage the flow of money between customers, suppliers, and his own needs. Although every month is different, he still wants to save for retirement.

✔️ So, we've set up a small regular payment into his pension, ensuring that something is saved each month.

✔️ We'll meet every March to make a larger payment from the accumulated surplus cash in the business.

✔️ Of course, we're involving my client's accountant in the process to ensure that the March investment is tax-efficient and supports the business's tax position.

As long as you're engaged with a Financial Adviser, you'll receive prompts to add to your pension. During busy times as a business owner, it's reassuring to know that your retirement is well-managed.

If you need assistance figuring out the best way to make pension contributions, feel free to contact me to set up a call.

The value of a pension will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstances.