As a business owner, you're accustomed to planning for long-term success. But do you find it difficult to separate your own financial plan from that of the business? In this article, we’ll explore some key steps to consider in relation to your own long-term financial plan.
It's tempting to put off retirement planning or to focus on your business, but the impact of this can be more significant than you might realise. By postponing or ignoring pension savings, you miss out on potential regular pension saving and the potential long-term growth of your investments. A pension can allow you to extract wealth from a business tax-efficiently, which can build up over time to help with your long-term financial plan.
This provides tax relief to your business and can save you up to 25% in Corporation Tax. By taking advantage of these tax benefits, you not only help fund your retirement but also potentially optimise your business's financial position.
From April 2023 it is possible to save £60,000 per annum into a pension, you also have the ability to potentially carry forward unused allowances from the previous three tax years. This allows you to potentially make a pension contribution of up to £180,000 without being hit with an annual allowance tax charge.
With the Lifetime Allowance also being abolished, pensions provide a valuable tool to extract wealth from your business and to boost your long-term financial position. The Lifetime Allowance was the maximum amount that you could take from pensions without paying a Lifetime Allowance Tax-charge.
Whilst retirement planning may not be a top priority while you’re still running a business, it's crucial to take proactive steps towards securing your own financial future. Pensions are a tax efficient way to extract wealth from your business, and this helps ensure that your own financial plan is diversified. You don’t want to be fully reliant on a business sale for your retirement! By prioritising pension planning, you can ensure a comfortable and fulfilling retirement.
Consulting a financial planner can be instrumental in securing financial stability for yourself and your business. We can help you to consider how much you can save into a pension.
If you're interested in learning more about our services and would like to schedule an initial meeting, feel free to reach out to us at 0191 384 1008 or via email at enquiries@wealthofadvice.co.uk.
Our initial meetings are always free of charge, and we're flexible in accommodating your preferences, whether it's an online meeting or an in-person discussion at one of our offices.
