Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

Pension options if you are self employed or run your own limited company

The freedom and flexibility that comes with being your own boss attracts many people. However, this also means that you are in charge of your own financial future which can be daunting.

Pensions matter when you are a business owner

One area that business owners and self-employed people often neglect is pensions.

There are more than 4.8 million people who are self-employed, yet only 31% of these are saving into a pension*.

If you are employed then usually your employer will set up your pension for you and you will automatically get employer and personal contributions paid into your pension. Self employed individuals do not get this advantage, and it is therefore their own responsibility to set up and start saving into a pension.

Start a Retirement Account

At Four Wealth Management, we offer a flexible Retirement Account through St. James’s Place. A Financial Adviser at Four Wealth Management can work with you to establish your retirement goals and will recommend a pension portfolio that will help you to achieve your retirement goals.

If you have any old workplace pensions, your financial adviser could also review these for you.

Speak to a Financial Advisor

Ways to start contributing to a pension

You can pay into a Retirement Account monthly, or with a lump sum, or a combination of both.

Regular Savings

Making small monthly payments into your pension each month can add up over time. The earlier you start to make pension contributions, the more time your pension pot has the potential to benefit from compound interest over time.

If you are limited company owner or a sole trader, it is likely that your income fluctuates each month so committing to a regular monthly payment might seem like a big commitment. However, it is possible to adjust or even pause your monthly payments if needed.

Lump sum

You also have the option to pay lump sums into your pension, large one-off payments are a good way to give your pension pot a boost. This may be a good alternative if your company is quite new or if your income fluctuates a lot.

It is also important to note that sole traders cannot benefit from employer pension contributions.

Tax relief

Pensions are one of the most tax-efficient ways to save for your future. For every personal contribution that you make within your allowance, you will automatically receive basic rate tax relief of 20%. For example, if you pay in £80 then £20 will automatically be added on top. If you are a higher or additional rate taxpayer then you can claim 40 or 45% tax relief on pension contributions through your annual tax return.

Even if you are not currently employed, you can contribute £2,880 into a pension each year which would be topped up to £3,600 by the government.

How long do I continue to get tax relief on pension contributions?

Even if you are approaching retirement age, it is not too late to start saving more into your pension. If you are a UK resident, you can benefit from pension tax relief until the age of 75.

Start planning for your retirement today

Book a no-obligation meeting with a financial adviser at Four Wealth Management to discuss creating a plan for your retirement today by calling us on 0117 973 0500 or book online.

The value of an investment with St. James’s Place 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 depends on individual circumstances.

*IFS, ‘Retirement saving of the self-employed’, 2020

Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

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Pension options if you are self employed or run your own limited company
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