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As a business owner, you might be too caught up with the current hustle and bustle of everyday life to spend much time looking forward to your future. However, have you ever thought about what your future standard of living might look like with only the state pension – that’s £800 a month – to support you?

No matter how busy life seems, now is the time to consider what your retirement plans are, and the positive difference that a personal or workplace pension could make to your future comfort and happiness.

Employer contributions

There is no limit on the number of schemes an employer can set up and no restriction on the amount they can contribute. Employer’s pension contributions are paid gross and are allowable as a business expense. Regardless of the amount, tax relief is available on pension contributions so long as it passes the test for being ‘wholly and exclusively’ for the purposes of trade, that is, an expense incurred while running the business or attracting more business. Tax relief on an employer’s contribution is usually given in the accounting period in which the contribution is paid, unless a loss is created.

Types of pensions available


  • Personal pensions: Small business owners and the self-employed can establish a personal pension at any time. Personal pensions can exist alongside workplace pensions and other types of retirement savings schemes. The annual allowance for tax relief on pensions currently stands at £60,000 per year for the 2023-24 tax year.
  • Self-invested Personal Pensions (SIPPs): These are similar to standard personal pensions as they also follow the same contribution, tax, and eligibility rules as personal pensions. However, SIPPs have a wider investment choice than a traditional personal pension.
  • Small self-administered schemes (SSASs): Offer additional investment options and typically have less than 12 members, all of whom must be trustees. An SSAS scheme can lend up to 50% of its net assets to the sponsoring employer.

Pension funds as an exit strategy for business owners

If you plan to sell your business to fund your retirement, paying large contributions into your scheme has the double benefit of providing you with a pension whilst reducing capital gains tax on the sale of the company.

Personalised pension advice

With all the different pensions available, such as a workplace pension, a personal pension, and a SIPP, the choice can be overwhelming. If you’d like to set up a pension or even have your own pensions reviewed, contact us at CTT Private Client for one-to-one, personalised pension advice from one of our professional financial advisers.