Corporate
retirement planning
Choosing the right pension scheme options for you and your employees
If you’re a business owner there are many different pension options available both to you and to your employees. We can help you navigate this complex area and advise you on how to make sure that you choose the most suitable pension schemes available for your particular requirements.
Offering employee benefits such as pensions is a very effective solution to attract and retain good staff. Talk to us about how we could help you take advantage of the options available and tailor a package that really works for your business.
If you currently employ five or more staff, you need to offer them access to a Stakeholder pension, unless you are exempt, for example, if you have an existing qualifying scheme. You don’t have to actually contribute yourself, but you must facilitate employee contributions.
From 2012, if current pension legislation proceeds, you will either have to contribute to a national scheme called ‘Personal Accounts’ for your employees or offer a private scheme that makes them exempt.
In addition, from 2012 to 2015 you could also have to contribute 3 per cent of employee band earnings. Band earnings are currently proposed to be between £5,035 and £33,540 for employees, staggered over this period. You should plan ahead for these potential changes as you could be faced with an increase in your wage bill.
State pension age is increasing. From 2026, it will increase to 66, increasing gradually to 68 by 2046. It is also important, therefore, to plan for the effect these changes could have on your business.
If you are the owner of a business, pensions are investment plans specifically designed to help you save for your retirement. They can also be a very tax-efficient way of drawing money from the business. Pensions shouldn’t be dismissed without careful consideration. However, if you don’t like the idea of investing in a pension, talk to us about other possible alternatives.
If you are currently in the early days of building your business, you should be mindful of the dangers of relying on this entirely to support your retirement years. One advantage of having your own pension provision is that you can build up wealth independently of your business, essential if your business isn’t as successful as you had planned.
Pension funds do not just invest in stocks and shares. Most plans allow you to invest in all the main asset classes, including cash, fixed interest, property and shares, allowing you to tailor your plan to meet your own preferences. Self-Invested Personal Pensions can offer even greater choice for the more sophisticated investor.
The value of investments and the income from them can go down as well as up and you may not get back your original investment. Past performance is not a guide to future performance. Tax benefits may vary as a result of statutory change and their value will depend on individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent finance acts.