Do it yourself pension contributions

bitstreams

I run my own limited company and have done for years, My pension provision is patchy, to say the least. I'm 55.
At the moment I pay £300 per month in to a St James Place scheme and have done for around 6 years. I don't want to withdraw any more salary/dividends from the business, as I'm trying to keep below higher rate tax, but there are more funds that I could take. I could just increase the fairly minimal amount I pay in to the St James Place pension, but I'm not on particularly good terms with the advisor, so was thinking of doing something else.
I would prefer to have a pension that I felt in control of, where I could divert chunks of money from the business as an when it was available. Can I do this myself or do I have to go through an advisor in some way? Pension contributions are tax free so how do I flag them as pension contributions when withdrawing from the company?

Linton

To answer your last question first: you dont withdraw money from the company to make a pension contribution, your company makes an employer contribution to your pension.  That is an allowable business expense for tax purposes.

Your company can make whatever pension contributions it wants whenever it wants to, limited only by the £40K annual allowance, which can be carried over from the previous 3 tax years if required.

You can set this up yourself, you dont need an advisor.  Perhaps you could consider moving the £300/month to your control.  You may find it is significantly cheaper.

tacpot12

I would agree with everything Linton has said. If stopping your relationship with SJP immediately seems too risky, you could make a company contribution to a new Self Invested Personal Pension (SIPP immediately) and see how that goes, and then move your investment from SJP when you are happy to do so. SJP are renowned for high charges, and because you are not saving very much with them, the charges have an disproportionate effect on your investment returns. There is nothing to stop you mimicking the investments that you have with SJP in your SIPP if you wish to do so, just buy your funds from the best providers of such funds.     

dunstonh

At the moment I pay £300 per month in to a St James Place scheme and have done for around 6 years

As a company director, that is highly unlikely to be the best option.  It is not as tax efficient as company contributions. 

but I'm not on particularly good terms with the advisor,

Is this because they told you to pay the contributions personally instead of the optimal way of making company contributions?  If not, then this is another thing you can add to your list.

I would prefer to have a pension that I felt in control of, where I could divert chunks of money from the business as an when it was available. Can I do this myself or do I have to go through an advisor in some way?

You can do it yourself.

Pension contributions are tax free so how do I flag them as pension contributions when withdrawing from the company?

They are not tax free.  They are a business expense.  You record them as you do any business expense and like all business expenses, it will reduce your corporation tax.

bitstreams

Ok, thanks for the responses. I understand that I don't withdraw the money and then invest in the pension, it was probably my wording that wasn't clear.
So if I want to make a separate company contribution to a SIPP, where do I start with that. A quick search of "create a SIPP" seems to find lots of hits, from HL and others. Is it just a case of doing that and then paying in from the company account or is it more complex than that? Other than the 40K limit, is there an allowance I'm using up by have the SJP payment still in place at the same time?

Edit: Sorry, have just seen that MSE has a page on this - will have a read

zagfles

bitstreams said:

Ok, thanks for the responses. I understand that I don't withdraw the money and then invest in the pension, it was probably my wording that wasn't clear.
So if I want to make a separate company contribution to a SIPP, where do I start with that. A quick search of "create a SIPP" seems to find lots of hits, from HL and others. Is it just a case of doing that and then paying in from the company account or is it more complex than that? Other than the 40K limit, is there an allowance I'm using up by have the SJP payment still in place at the same time?

Edit: Sorry, have just seen that MSE has a page on this - will have a read

Yes read the MSE guide on this. But for company contributions, you just need to watch out for the annual allowance. Also you need to make sure the SIPP provider knows they are company contributions so they don't claim tax relief, the SIPP provider can only claim tax relief on personal contributions. If the SJP payments are net personal contributions, you'll need to gross them up to work out how much of the annual allowance they use up.

dunstonh

So if I want to make a separate company contribution to a SIPP, where do I start with that.

In mayo and Kermode style.... you just open a SIPP and make an employer contribution.

But really that is all you need to do.  Virtually all retail pensions allow employer contributions.    There is no specialist product required.  This is why you are getting so many hits.

Other than the 40K limit, is there an allowance I'm using up by have the SJP payment still in place at the same time?

Actually, you can go beyond that with company contributions.

Albermarle

It is easy to open a SIPP/pension  on line .
As a rough guide for amounts below £100K a platform that charges a % fee is better. e.g. HL; AJ Bell ; Fidelity 
Above that a fixed fee platform is cheaper : Interactive Investor & Iweb for example.
With all these you can invest in funds , ETF's, Investment trusts, individual shares etc . A myriad of choice.
If you want something a lot simpler with limited choice then you can look at Legal and General SIPP or Nutmeg + others .

Or for something in the middle you can head to the well known traditional pension providers like Aviva, Standard Life etc .+ also Vanguard have a decent low cost offering. All these restrict you to their own funds 

zagfles

dunstonh said:

So if I want to make a separate company contribution to a SIPP, where do I start with that.

In mayo and Kermode style.... you just open a SIPP and make an employer contribution.

But really that is all you need to do.  Virtually all retail pensions allow employer contributions.    There is no specialist product required.  This is why you are getting so many hits.

Other than the 40K limit, is there an allowance I'm using up by have the SJP payment still in place at the same time?

Actually, you can go beyond that with company contributions.

Indeed, check an annual allowance calculator eg https://www.hl.co.uk/pensions/contributions/carry-forward-rule/annual-allowance-calculator