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Director's Pensions

The aim of a director's pension is to build up a sum of money in a tax-efficient way that will be used to provide you with an income when you retire.

Directors can use occupational schemes, stakeholder and personal pensions, but also have other alternatives such as small self-administered scheme available.

Tax-free cash

You can usually take up to 25% of it as a tax-free lump sum when you take your benefits (depending on your pension scheme rules). The remainder of your benefits will be paid subject to income tax.

Small Self-Administered Scheme (SSAS)

Small Self Administered Schemes (SSAS) are suitable for the controlling directors of companies, which make it ideal for most small limited companies where the shares are mainly or wholly owned by working directors.

What is a Small Self-Administered Scheme?

A SSAS is an occupational pension scheme that offers its members flexibility and control over the investment policy and underlying assets. It is a pension scheme set up under trust with fewer than 12 members.

The assets of a SSAS do not belong to any particular member of the scheme due to the collective nature of the trust. The members, as trustees, will jointly control the scheme and its investments.

Tax relief is given against Corporation Tax for company contributions, and personal Income Tax for any personal contributions.

Small Self-Administrated Schemes are regulated by the Pensions Regulator.

Advantages of a Director's Pension

Using a pension scheme can be a far more sensible strategy than relying on your business to provide income to fund your retirement. You can receive tax relief at your highest rate on any personal contributions and your company contributions do not incur income tax or national insurance, unlike other benefits. A pension can be a way of extracting business profits in a tax-efficient manner; for the benefit of a director or business owner.

Your pension fund will grow free from most taxation, provide a tax-free lump sum and an income after that, once you decide to retire or take the benefits.

Employer contributions can be considered a 'business expense' and therefore deductible as an expense for the calculation of Corporation Tax.

Having a pension remains one of the most tax-efficient ways for business owners and company directors to accumulate wealth for retirement.

Exit strategy

For many business owners, their business is their pension, which is why it is important to have an exit strategy in place when you retire.

As the rules currently stand you may be able to carry forward any unused annual allowance from the previous three years. This will allow you to make one-off contribution to your pension.

A pension is a long term investment, the fund may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

The Financial Conduct Authority does not regulate occupational pensions.

Kennet Financial Services

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About us

Independednt Financial Advisers (IFAs) based in Devizes, Wiltshire

Our philosophy is simply to guide our clients through the various stages in their lives where expert financial guidance is required from an experienced and trustworthy adviser.

Our aim is to help our clients achieve their financial objectives in a tax efficient and easily maintained manner with clear, uncomplicated solutions.

The reward is being able to work at achieving a long and happy association with clients where trust and transparency are paramount in the relationship.

Advisers David Kinch and Ben Trow have many years experience working with Individuals and Businesses and have built a reputation based on trust and the ability to explain what can be complicated subjects in easy to understand ways both face to face and in writing.

We use our experience to cut through the jargon unfortunately plaguing our Industry to provide options and solutions tailored to your needs.

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We serve people best who:

  • have little time and/or expertise to manage their financial affairs
  • are seeking expert financial advice and/or investment review
  • want help to formulate and maintain a clear financial plan and strategy to make the most of their hard earned money
  • need a “sounding board”
  • want the discipline of a regular review of their finances
  • are seeking a sense of control, peace of mind and financial freedom
  • regard service and a trusted relationship as key to working with advisers of any sort

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Our Specialist Areas

The Financial Services Authority does not regulate Taxation & Trust advice or Will writing.

Kennet Financial Services provides services like financial planning and financial advice, tax, personal pension advice as well as business advice. We also provide many other types of advice and private investing in Devizes, Wiltshire.

We offer a comprehensive financial planning service to include tax planning opportunities. We also provide a bespoke investment management service with an emphasis on strategic asset allocation.

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