TT28: Retirement Saving

What are you going to do to provide for your retirement? Many business owners say that their business is their pension scheme and/or they will rely on the cash tied up in their home. Sometimes it is possible to use the business or the home to finance retirement, however putting all of your eggs in these two baskets is risky.Who knows what your business will be worth at the time you retire – and you may not want to sell your home!

Most people need to save money throughout their working lives in order to provide for the future. The real question is where to put that money.

What are the options

As ever, the decisions are complex. Pension schemes offer substantial tax advantages at the time the contributions are paid (generally such contributions get a full tax deduction at the taxpayer’s marginal rate i.e. 40%). However, there are substantial restrictions on the way that funds can be drawn from a pension scheme at retirement.

Alternatively you might consider making a part of your retirement provision using individual savings accounts. A husband and wife can invest up to £14,000 per annum in these tax-free shelters.

There are all sorts of other options you may wish to consider including unit trusts, hedge funds and savings plans to name but a few.

Barnes Roffe Topical Tips

  • Be sure you know how much you need to contribute to build up your fund to the required size.
  • Regularly review the performance of your funds.
  • Monitor whether your plans are being achieved.
  • If your pension scheme was started before 17th March 1987 you have a huge opportunity – see Topical Tips No.7.
  • Speak to your engagement partner about a thorough review of your plans for retirement.We can organise for other professionals to be involved as required.
Talk to Barnes Roffe today
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