Pension advice for limited company

James822

Hello,

I run a company and am the director, my wife is also secretary and takes a small wage.

We are at a stage where we need to start putting money into a pension but have no idea how to start or the best way to go about this given our situation.

I’ve tried talking to a IFA but they were not interested in helping as we didn’t help a current pension pot

I’ve read about various options from the company paying in to auto enroll to just both start saving into our own private pensions.

If there is any basic guidance or if there is any recommendations you could give us to where we could seek bespoke advice that would be very helpful.

Thanks in advance.

James

MallyGirl

I am not advocating PensionBee as a provider but this is probably worth a read:

https://www.pensionbee.com/pensions-explained/pension-contributions/contributing-to-your-pension-from-your-limited-company

Aegis

James822 wrote: »

Hello,

I run a company and am the director, my wife is also secretary and takes a small wage.

We are at a stage where we need to start putting money into a pension but have no idea how to start or the best way to go about this given our situation.

I’ve tried talking to a IFA but they were not interested in helping as we didn’t help a current pension pot

I’ve read about various options from the company paying in to auto enroll to just both start saving into our own private pensions.

If there is any basic guidance or if there is any recommendations you could give us to where we could seek bespoke advice that would be very helpful.

Thanks in advance.

James

Do you have a level of contribution in mind? If it's well under the £40k annual limit, then advisers will probably shy away unless they're set up to work on a fixed fee (you may then feel the fees are too high for the benefit, but that's then your call rather than just being turned away).


On the other hand, if you're looking at hefty levels of contribution, even an adviser that still operates purely on a percentage-based system should be interested.



If you prefer to avoid the adviser route, you can pick pretty much any stakeholder pension, personal pension or SIPP and fund it via company contributions, as that should be easy enough and is usually perceived as preferable vs making personal contributions due to the saving in either corporation tax or national insurance (depending on whether you pay yourselves dividends or salary). Not guaranteed, of course, as personal circumstances vary enormously, but probably a reasonable starting assumption.

dunstonh

I run a company and am the director, my wife is also secretary and takes a small wage.

That is the old fashioned way of doing it. You dont see it as much nowadays as company secretaries are no longer required by limited companies and most add the spouse a shareholding director nowadays. If a spouse has a greater buy into the business then HMRC are unlikely to look at is as closely. Plus, where the shareholding is 50/50 and both are directors, it means pension contributions can usually be more balanced.

I’ve read about various options from the company paying in to auto enroll to just both start saving into our own private pensions.

Do you have any employees?
Your wife could trigger it if you have her on paper as doing work of employment (which is another reason most have moved the spouse to director). You can pay her as an officer of the company without triggering auto-enrolment rules but if you pay her as an employee, then you trigger auto-enrolment.

if its just the two of you then you dont want to trigger auto-enrolment.

If there is any basic guidance or if there is any recommendations you could give us to where we could seek bespoke advice that would be very helpful.

Only place you will get advice is an IFA or FA (and you dont want to use an FA). Anything else is just discussion and opinion.

It is likely that two individual schemes with employer contributions is the best option. There are caveats to that but that is the starting point.

Fermion

Your accountant should be able to advise regarding Employer contributions into SIPP or private pension (although not the funds etc) .
I was in a similar situation many years ago although I already had an active SIPP with HL. I found the HL pensions helpdesk provided some very good information about the mechanism for making Employer pension contributions into an employee SIPP. I think they may also have some useful fact sheets.
The only thing to bear in mind is that you don’t get the 20% (or 40%) HMRC tax advantages with Employer contributions, but the Employer pension contributions come straight off the top line as an expense so you don’t pay corporation tax.

Prism

Typically the way to pay into a pension is directly from the company. I use a SIPP, you could also go with an IFA. I put in a monthly amount but also consider lump sums towards the end of the company year to reduce corporate tax.