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Financial planning for owner managed businesses

Owner Managed Business

Do you run your own business? Are you a sole trader? Have you got a financial plan in place?  Many owner managed businesses don’t have sound financial planning and could be losing money or missing out on potential benefits.

There are many things that a business owner has to think about and often financial planning gets overlooked. Failing to plan can really affect your business now but also your financial situation in later life.

Have you got personal provisions in place? Things like income protection, life assurance and critical illness cover. These are all key areas that you need to consider because they really make a difference if you find yourself unable to work.

You also need to think about pensions, investments and savings so that you can retire comfortably when the time comes.

Many sole traders don’t pay into a pension scheme. They think that since there is no employer contribution it isn’t as beneficial. However, contributions into pensions are a very tax efficient way to save for retirement. Contributions are tax free and you get tax relief too. This means that every £80 you put in your pot will actually be worth £100. You may even be eligible for higher tax relief if you’re a higher rate tax payer.

If you are eligible for higher relief then you have to claim it on your self-assessment so if you didn’t know about this then you may have been missing out. Don’t worry as you can reclaim up to three years of tax relief if applicable which could be a huge boost to your pension pot. If you aren’t sure if this applies then speak to a professional adviser who will be able to explain how it works.

If you are thinking of buying the property you run your business from then you can do this using your self-invested personal pension if you have enough money in it. This is quite complex but is a good way of saving tax as you pay rent to your pension and could potentially save on corporation tax, income tax and capital gains tax. This is perfectly legitimate but it can be very complex so you will need professional advice if you think this could be an option for you.

If you employ staff then it isn’t just your own pension you need to consider. Auto-enrolment schemes carry administrative costs and some are better than others. An independent financial adviser can help you select the best scheme for your business.


At Rockwood we’re passionate about pensions and can help you understand what your options are. Whether you have one or several pensions we can review them for you and explain the advantages and disadvantages of consolidation. If you do decide to switch or consolidate we can help you chose the pension scheme that is right for you. This will be based on your circumstances now and the lifestyle you want to achieve in the future. All of our advice is completely impartial.  If you’d like advice on existing pensions or setting up a new pension then we’d love to help. Contact us today to start making the most out of your pensions now.

Nothing in this blog constitutes financial advice or recommendations, for more information please contact Rockwood Financial Solutions on 0330 332 2679.