Short Term Pension Advice

diver10

Albermarle said:

diver10 said:

Sarahspangles said:

diver10 said:

NoMore said:

Is she a director of this company ? Most tax efficient would be to make contributions directly from the company to a pension.

she is one of the directors, yes

Have the directors planned for the eventual closure, or for how each will manage to exit? It’s outside my experience but I’ve seen posts where prior planning could have reduced the tax bills.

I have got a SIPP, and it’s not difficult to manage. The platform is no more difficult to use than an online banking app. You then need to choose funds, just as you do in most workplace pensions. The platform probabiy has much more choice, but may suggest some favourite funds which makes it less overwhelming. Users of this forum can’t advise but will normally comment on choices.

Ive no idea about the tax planning on the winding up of the business but the plan is around 5/6 years which coincides with the owner being 65/66 and my wife being 60.  It's a small company with 5 employees plus around 10 subcontractors. 

I think SIPP may be the way forward, it's just very new to me. Ive been very fortunate to have an excellent FS Pension and although we are good at saving, we aren't that good at making our money work well. 

What ever happened to the old style (are they old now) Personal Pensions? 

Technically a final salary type pension is known as a Defined Benefit ( DB) pension.
The other type are known as Defined Contribution ( DC) pensions.
SIPPs, personal pensions, stakeholder pensions, workplace pensions ( if not DB ) auto enrolment pensions, robo pensions etc are all variations of a DC pension. They all are bound by exactly the same tax and legal rules. 
The difference tend to be in the range of investments available ( from thousands to just a handful) and differences in charging structure.
Once SIPPs were really for more experienced investors, but for some reason seem to have become the go to product for many, despite the fact that for the majority something simpler would probably be more suitable. 
One advantage with most SIPP providers, is that they have up to date software and good websites/apps, which is not always the case for other DC providers. 

thanks thats very helpful

poseidon1

diver10 said:

Sarahspangles said:

diver10 said:

NoMore said:

Is she a director of this company ? Most tax efficient would be to make contributions directly from the company to a pension.

she is one of the directors, yes

Have the directors planned for the eventual closure, or for how each will manage to exit? It’s outside my experience but I’ve seen posts where prior planning could have reduced the tax bills.

I have got a SIPP, and it’s not difficult to manage. The platform is no more difficult to use than an online banking app. You then need to choose funds, just as you do in most workplace pensions. The platform probabiy has much more choice, but may suggest some favourite funds which makes it less overwhelming. Users of this forum can’t advise but will normally comment on choices.

Ive no idea about the tax planning on the winding up of the business but the plan is around 5/6 years which coincides with the owner being 65/66 and my wife being 60.  It's a small company with 5 employees plus around 10 subcontractors. 

I think SIPP may be the way forward, it's just very new to me. Ive been very fortunate to have an excellent FS Pension and although we are good at saving, we aren't that good at making our money work well. 

What ever happened to the old style (are they old now) Personal Pensions? 

This is a prime example of where a decent firm of proactive accountants advising your wife's family business could have been providing appropriate business exit/ transition advice for a number of years before now.  Such advice could have included referring the directors for appropriate pension arrangements funded by the company on their behalf. 

If your wife and brother are not prepared to put their heads together and seek advice from a more engaged accountancy firm with regard to a medium term business  exit strategy ( inclusive of pensions) then yes your wife can unilaterally push ahead with her own SIPP with the assistance of an IFA, if neither of you have confidence in a cheaper DIY approach.

However, the ability for the company to fund the SIPP ( with potential corporate tax savings) should not be ignored, and best for your wife and brother explore that together as a preferred course of pre business exit planning.