Whatever your plans are in the future, you will need an income. How far will a state pension of £185.15 per week take you? (This is the new rate from April 2022). Many business owners consider their business to be their pension fund. However, not all businesses survive to be sold. Even selling may not produce the anticipated funds, and when other family generations are involved in the business and want to carry it on, selling may not be an option.
Others may look to invest funds in property, but they can end up asset rich and cash poor – valuable assets which may not generate sufficient income or any at all if there are no tenants to be found, and these may give rise to substantial tax liabilities on disposal.
Do not overlook the benefits of making pension contributions. You and your staff are probably now contributing for their long-term benefit – so why not contribute for your own benefit? Employ your spouse in the business? Why not make a contribution to their pension fund too from the business?
There can be significant tax savings, either personally or inside your company, and there can also be potential inheritance tax benefits too.
Please get in touch with us to discuss this further.
