top of page

Three In 10 Business Owners Have No Pension



Three in 10 business owners do not have a pension independent of their business, according to Rathbones Group, one of the UK’s leading wealth and asset management firms, warning that millions may be taking unnecessary risks with their future finances.


Rathbones polled 3,092 UK adults, including almost 10% business owners, and also found that 44% do not even hold an ISA of any kind. The vast majority (95%) have money in savings accounts and/or Premium Bonds, suggesting many are prioritising short term cash over long-term planning.


Faye Church, Senior Financial Planning Director at Rathbones, based in Guildford, says:

“We often meet owners of successful businesses who see their company as their retirement plan and prioritise reinvesting back into the business over pension saving. That’s often driven by a desire to grow the business, and the belief that a future sale will ultimately take care of retirement. But relying on a business alone to fund later life is a risky strategy."

“The future is unpredictable. Small businesses can be hit by economic shocks, supply chain disruption, losing customers or a crisis no one sees coming. That makes it hard to know what your business will be worth when you eventually step back – or even whether you’ll be able to sell it at all."


“Without a pension, you could end up with far less to live on than planned, and even a successful sale may still fall short of funding the lifestyle you want in retirement.”


Looking specifically at entrepreneurs, almost a quarter (24%) of respondents said they do not have a pension. More than a third (36%) said they do not have an ISA, although 95% do hold savings and/or Premium Bonds.


Gordon Lawrie, Senior Investment Director and Head of Edinburgh Office at Rathbones says:

“From our dealings with early-stage businesses, there are often many competing financial pressures, from irregular cash flow and reinvesting in the company to paying down borrowing or covering personal expenses,”

“But for limited company owners, contributing to a pension can be one of the most tax efficient ways to extract money from the business and invest for the future.”


Why pensions are still powerful for business owners


Faye Church says:


It’s common for business owners to prioritise tax efficient income today, typically taking a small salary within the personal allowance and the rest as dividends. That approach can create the false impression that pensions aren’t worthwhile, particularly if your salary sits below the income tax threshold. In reality, pensions can be one of the most tax efficient ways for business owners to invest for the future.


Tax relief on personal pension contributions

When you make a personal contribution to a pension, the government automatically adds basic rate tax relief. For every £100 you contribute, HMRC tops it up by £25. Higher and additional rate taxpayers can also claim further tax relief through self-assessment.


Employer contributions from your limited company

Limited company owners can make employer pension contributions directly from the business rather than paying themselves and contributing personally. These payments are made from pre tax profits and do not attract National Insurance. With employer NI set at 15% from 2026/27, this can represent a significant saving compared with taking the same amount as salary.


Reducing your corporation tax bill

Employer pension contributions are treated as an allowable business expense and can be offset against a company’s Corporation Tax bill. Depending on the rate paid, this could reduce Corporation Tax by up to 25%, making pensions one of the most tax efficient ways to extract profits from a business.


Higher limits and more flexibility

Business owners can currently contribute up to £60,000 a year into a pension. The removal of the Lifetime Allowance also means it’s now possible to build a larger pension pot without the risk of additional tax charges. Where a spouse is involved in the business, making pension contributions for them can further improve household tax efficiency.


Why professional advice matters

Pensions can be highly tax efficient for business owners, but the rules are complex and what works best depends on income, profits and long-term goals. Allowances and tax treatments can change, and mistakes can be costly. Regulated financial advice can help ensure pension contributions are structured efficiently and support wider retirement and income plans.



Most Read

Dina Foods Announces Nationwide Ocado Retail Partnership

Dina Foods Announces Nationwide Ocado Retail Partnership

Family owned and run Mediterranean food specialist, Dina Foods, has secured a Parnationwide listing with Ocado Retail, further expanding the reach of its authentic bakery and confectionery products.

2026 Family Business Road Trip Set To Showcase The Strength And Diversity Of UK Family Firms

2026 Family Business Road Trip Set To Showcase The Strength And Diversity Of UK Family Firms

Family Business United is delighted to announce the launch of its 2026 Family Business Road Trip, a six-week journey across the UK celebrating the innovation, resilience and community impact of family-owned firms.

Celebrating 20 Years Of The Pantry

Celebrating 20 Years Of The Pantry

The Pantry marked a hugely significant milestone on Monday 6th April, celebrating 20 years since it first opened its doors as a small sandwich shop perched on Hayes High Street in Hillingdon, Middlesex.

Categories

  • Jun 10, 2023
  • 2 min read

Updated: Oct 30, 2023


Millions of Brits wrongly believe that all cows live free range - when 20 per cent actually spend their entire lives in sheds. A poll of 2,000 adults found only three in 10 are aware of the zero-grazing practice - where the dairy cow is never allowed to roam free, being kept in a shed for its entire life. But campaigners claim this affects up to a fifth of UK dairy cows.


After being made aware of the farming technique, 69 per cent of consumers opposed it on ethical grounds. And 49 per cent said they would be unlikely to buy any dairy products that were a result of this indoor process.


While 56 per cent went as far as to say it should be banned completely – as 87 per cent believe cows deserve a nice life.


The research was commissioned by Viva!, whose spokesperson said: “Ignorance about the UK dairy industry is widespread and profound. It’s not accidental that consumers are ignorant of zero grazing and other cruelties in the dairy industry. It is purposely camouflaged by constant images of a non-existent rural idyll."


“Zero grazing is sweeping across the world and already one-in-five UK dairy cows are victims, despite overwhelming scientific and public opposition.”


Busting Milk Myths

The research also found just 41 per cent of adults were aware cows have to be made pregnant and give birth to a calf before they can give milk.


And only 27 per cent knew all calves are grabbed from their mothers at birth and either killed or locked away in isolation.


Once aware of the facts, 24 per cent claimed they were prepared to change their habits to become more vegan – with 25-34-year-olds most likely to do so (45 per cent).


The thought of animals being poorly treated (58 per cent) and the environmental impacts of the meat and dairy industry (56 per cent) were the main drivers of this change.


Of those willing to change their habits, 53 per cent would try plant milks instead of dairy milk, and 48 per cent would attempt to reduce their consumption of cheese.


Although both of these top the list of things considered hardest to cut out of their diet, alongside chicken and butter, according to the research carried out via OnePoll.


In fact, almost one in 10 (nine per cent) consider themselves a ‘flexidairian’ – a term coined by Viva! to describe someone that wants to cut out dairy but finds it hard to.


The spokesperson added: “There is a clear lack of knowledge when it comes to how cows are treated, as it is often glossed over. But it’s encouraging to see people are willing to change their diets and cut back on dairy foods as a result of the inhumane processes used in farming.”

Most Read

Dina Foods Announces Nationwide Ocado Retail Partnership

Dina Foods Announces Nationwide Ocado Retail Partnership

Family owned and run Mediterranean food specialist, Dina Foods, has secured a Parnationwide listing with Ocado Retail, further expanding the reach of its authentic bakery and confectionery products.

2026 Family Business Road Trip Set To Showcase The Strength And Diversity Of UK Family Firms

2026 Family Business Road Trip Set To Showcase The Strength And Diversity Of UK Family Firms

Family Business United is delighted to announce the launch of its 2026 Family Business Road Trip, a six-week journey across the UK celebrating the innovation, resilience and community impact of family-owned firms.

Celebrating 20 Years Of The Pantry

Celebrating 20 Years Of The Pantry

The Pantry marked a hugely significant milestone on Monday 6th April, celebrating 20 years since it first opened its doors as a small sandwich shop perched on Hayes High Street in Hillingdon, Middlesex.

Categories

Law Firm Ellis Jones Expands Dorchester Presence

Law Firm Ellis Jones Expands Dorchester Presence

Regional law firm Ellis Jones Solicitors has expanded its presence in Dorchester as it continues to grow its full-service offering for individuals and businesses across West Dorset.

Golden Opportunity As Vail Williams Secures New HQ For Food Giant

Golden Opportunity As Vail Williams Secures New HQ For Food Giant

Property consultancy Vail Williams has successfully acquired new headquarters in Surrey for the UK’s leading supplier of world foods.

Global Brands Acquires Low-Calorie, Full Strength Beer Brand Skinny Brands

Global Brands Acquires Low-Calorie, Full Strength Beer Brand Skinny Brands

Global Brands, the drinks producer behind the likes of Hooch, VK and Franklin & Sons has announced the acquisition of the low-calorie, gluten-free beer and cider brand, Skinny Brands.

Recent Posts

bottom of page