Three In 10 Business Owners Have No Pension

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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.

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Jan 27, 2025
2 min read

Leading Scottish hospitality group Buzzworks has enjoyed another successful year as the business reports an increase in turnover, up 18 per cent from £29.9m to £34.8m, for 2024.

The company, renowned for its exceptional food and customer service, continues to go from strength to strength, with operating profit rising significantly.

Underlying EBITDA, before site opening costs and non-recurring items, grew from £2.94m in 2023 to £3.77m in 2024, as investment continued to be top of the agenda for the year.

Buzzworks’ growth is supported by a strategic focus on capital investment and people development, enabling the family-owned business to effectively navigate the current challenges facing the hospitality sector.

Colin Blair, Chairman of Buzzworks Holdings, said: “We are incredibly proud of what we’ve achieved over the past year, especially given the challenging market conditions facing the hospitality sector."

“However, although these are uncertain times for the industry, this is something that we have managed to successfully navigate as a family business thanks to our resilience and strong foundations playing out in another strong financial year.”

Buzzworks, which has built its reputation locally and throughout the industry as a people-focused business that is proud to support the communities in which it operates, has invested significantly in its new and existing venues.

A total of £3m was spent across the portfolio, including the Ayrshire based company’s first venues in Inverclyde and East Lothian – Scotts Greenock at the new Ocean Terminal marina, and Lido Musselburgh, amid plans for another new Herringbone bar and restaurant to open in Barnton.

Additionally, the group invested in the refurbishment of several existing venues, such as Herringbone Goldenacre, The Mill House, and the addition of a new function suite at its popular South Queensferry venue, Thirty Knots.

Colin continued: "The opening of Scotts Greenock in 2023 and Lido Musselburgh in 2024 have been particular highlights, marking an exciting milestone for Buzzworks as we expand into new locations."

“At the same time, refurbishments across our portfolio demonstrate our ongoing dedication to maintaining the high standards our customers expect when visiting any Buzzworks venue."

Looking ahead, the directors remain cautiously optimistic about the group’s prospects. Plans are in place to reinvest future cash flow into the existing estate and pursue new venue openings as and when potential opportunities arise.

Additionally, Buzzworks continues to invest in its team through its acclaimed training programme, which develops future leaders and supports the company’s growth ambitions.

The business is proud to be ranked among the Top 100 Best Companies to Work For in the UK once again, underscoring its reputation as a top employer in the sector.

Buzzworks Holdings manages 21 prestigious venues across East, West & Central Scotland and over 800 staff.  

The award-winning company offers an aspirational dining and entertainment experience across Scotland through its other stylish brands – Scotts, Lido, House, Vic’s & The Vine, The Duke, Thirty Knots, The Bridge Inn, The Fox and Herringbone.

For more information on Buzzworks please visit www.buzzworksholdings.com

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Three In 10 Business Owners Have No Pension

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