• November 28, 2023
 Company pension planning for business owners

Company pension planning for business owners

Business owners are likely to be too caught up with the current hustle and bustle of everyday life to spend much time looking forward to the future. That’s why it’s worth encouraging your clients to think about what their future standard of living might look like with only the state pension – that’s £800 a month – to support them.

No matter how busy life seems, now is the time to consider retirement plans, and the positive difference that a personal or workplace pension could make to future comfort and happiness.

Employer contributions

There is no limit on the number of schemes an employer can set up and no restriction on the amount they can contribute. Employer’s pension contributions are paid gross and are allowable as a business expense. Regardless of the amount, tax relief is available on pension contributions so long as it passes the test for being ‘wholly and exclusively’ for the purposes of trade, that is, an expense incurred while running the business or attracting more business. Tax relief on an employer’s contribution is usually given in the accounting period in which the contribution is paid, unless a loss is created.

Types of pensions available

  • Personal pensions: Small business owners and the self-employed can establish a personal pension at any time. Personal pensions can exist alongside workplace pensions and other types of retirement savings schemes. The annual allowance for tax relief on pensions currently stands at £60,000 per year for the 2023-24 tax year.
  • Self-invested Personal Pensions (SIPPs): These are similar to standard personal pensions as they also follow the same contribution, tax, and eligibility rules as personal pensions. However, SIPPs have a wider investment choice than a traditional personal pension.
  • Small self-administered schemes (SSASs): Offer additional investment options and typically have less than 12 members, all of whom must be trustees. An SSAS scheme can lend up to 50% of its net assets to the sponsoring employer.

Pension funds as an exit strategy for business owners

If a client plans to sell their business to fund retirement, paying large contributions into a scheme has the double benefit of providing them with a pension whilst reducing capital gains tax on the sale of the company.

Personalised pension advice

With all the different pensions available, such as a workplace pension, a personal pension, and a SIPP, the choice can be overwhelming. If you’d like help setting up a pension for a client or having current pensions reviewed, contact us at CTT Private Client for personalised pension advice from one of our professional financial advisers.

This article was submitted to be published by CTT Group as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.

CTT Group


  CTT Group is an established Legal Services firm providing multi-disciplinary support for the UK’s Professional Adviser community. Their expertise spans multiple areas of Law, Estate Planning, Finance and Tax matters. CTT Group is recognised as a leading figure in the industry due to their wealth of experience and technical knowledge in the legal and financial sectors. CTT Group is made up of six areas: CTT Professional Services: A specialised knowledge hub designed for the Professional Adviser community and CTT Group members. The Professional Services team will provide you with a bespoke training and support package to suit any business. This includes the New entrants team, Training, Estate Planning Team, Professional Indemnity Insurance Service & the Resource Hub. CTT Tax and Trust: a premium support system for the Professional Adviser community, providing professional executor and Trustee services. They specialise in Estate Planning, Tax and Trust matters and have a wealth of knowledge and experience in delivering the right solutions for your clients. CTT Legacy Software: Ground-breaking legal software that will change how you work. Legacy was explicitly designed with you and your business in mind, so it will seamlessly align with your needs. It can also be tailored to suit your business needs, giving you complete control over your client journey. CTT Legal: Providing innovative and modern solutions to even the most complex legal problems. CTT Legal offer comprehensive Legal advice alongside CTT Law; an SRA-regulated law firm and strategic partner of CTT Group. This includes Residential and Commercial Conveyancing, Litigation, Document production, Client care, Professional Executor & Professional Executor. CTT Accountancy: A newly established Accountancy firm that will work in partnership with you and your business. CTT Accountancy is a practice of highly skilled and experienced accountants with expertise in trust matters, uniquely positioned to offer your clients a range of accounting services, whatever their needs. CTT Private Client: Offering individual professional advice to high-net-worth individuals with various financial situations. Their specialist team have a wealth of knowledge and will work with you to understand your requirements and provide bespoke advice. Click here for more information: https://ctt-group.co.uk/ Contact: CTT Group Tel: 01926 514 390 Email: enquiries@ctt-group.co.uk Address: CTT Group, Gables House 62 Kenilworth road Leamington Spa CV32 6JX