Director’s pensions

Do you want a pension with a wider choice of investment options?

Most auto enrolment pensions offer a limited choice of low-cost pension funds. If you are seeking to have your funds invested in a specific sector or geographical area a pension bespoke to you can accommodate this. You may be wanting active management where you entrust a discretionary fund manager to seek areas of opportunity and move away from areas of risk to maximise opportunities rather than your lower cost passive funds that follow markets. Bespoke pension advice can open these opportunities to you and aim to increase returns over and above the market.

Do you want a pension that can hold different types of assets over and above default investment funds?

A Self Invested Pension Fund (SIPP) or Small Self-Administered Scheme (SASS) can enable you to hold a much wider choice of assets than conventional Pensions. The main example of this is the fund can buy commercial property. If you’re a business owner and your renting premises then your pension fund, if big enough can buy a property to rent to your business. You still have to pay rent each month but instead of going to a land lord the rent gets paid into your pension fund building your long term wealth.

Do you want a pension that you can fund flexibly as your business expends?

Auto enrolment is funded as a percentage of employed income. Employees pensions typically fund 5% from their income and then you as the employer fund 3% making a total of 8%.

As a director you can fund substantially more into a pension up to a maximum of £40,000. When we work with Directors, we typically set up an easily affordable monthly payment. We then book an annual review to sit down with directors around two months prior to the year end of your business. At this time, you should have a strong idea of how good the year has been and what capital you have built up in the business. This is the perfect time to invest an additional lump sum into the pension to get money from your business into your name tax efficiently.

Do you want individual advice around your own unique retirement goals?

Very rarely do you get individual advice with auto enrolments. Advice around funding levels, investment strategy or retirement age. When we provide pension advice to Directors, we do look at the bigger picture to personalise your plan and make sure its in sync with your personal goals and objectives. Funding a pension without an adviser is a bit like driving a car without sat nav. You’re still going to get to your destination without sat nav but could you have done it more efficiently with greater choice, information and guidance?

Do you want a pension that can support your business with cash flow?

If you have a significant pension fund, you can hold these funds in a Small Self-Administered Pension (SASS). A SASS can provide you extra flexibility in that within limits the pension fund can buy shares in the sponsoring business injecting funds into the business. The sponsoring business can within limits also loan money from the pension fund at 1% above the bank of England rate which is very favourable compared to commercial borrowing rates.

In summary pensions are flexible, tax efficient tools that enable directors to move money from the business into their name. Once funds are in the pension regime there are many more options than you would see in a traditional auto enrolment which can be utilised for your family, your business and most importantly you.

If you do not currently fund a pension and want to get going we can help you start building a fund and work with you annually to build your fund to a significant enough size to start to access the more aspirational features that come with the more sophisticated pensions.

If you already have a significant fund call us it starts with a free initial consultation to see where you are now, what your objectives are and to then form a plan as to how we can help you. 

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets beyond our control. Investments and the income from them may go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future performance.