Directors Pensions

Pensions for Directors or Owner Managers

Pension Schemes for Directors or Business Owners will typically take the form of either a SIPP or a SSAS. Such schemes offer considerable flexibility and can be used simply as retirement savings vehicles or as an integral part of the business planning strategy.

SASS – Greater investment flexibility and control by the Member/ Trustees, Ability to loan the company money, up to 12 members in the scheme, Cost-efficient for directors and family members working within the business.

Pensions can be really useful, tax-efficient vehicles that not only enable funds to be set aside for retirement but also offer options along the way to getting there.

In 2006, “Pensions Simplification” was supposed to make saving for retirement as easy as saving into a Cash ISA, but since then constant changes to the rules surrounding pensions have seen the implementation of Annual and Lifetime Savings Allowances. Initially targeted at the upper end of the income/wealth scale, these allowances have been considerably reduced in value since their introduction and now impact many of our clients.

Shareholding Directors/Owner Managers are more likely than most to have variable income making them susceptible to the Annual Allowance Rules which are complex.

All too often we hear the phrase “my business is my pension” or “I can make more money investing in myself than through a pension”. But business doesn’t always work out; companies fail, bankruptcies occur, the best-laid plans come to nothing. Pensions are an excellent tax-efficient way of extracting money from a business. In most circumstances they offer protection from creditors and ensure whatever the future holds businesswise, you will have some resources set aside toward your retirement goals.