How do I start a pension?

Chris Andreou

April 21, 2021

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If you're setting up a private pension, you may want to start with tracking down any old workplace or personal pensions you may have, so as to consolidate them into your new pension plan. This allows you to manage your pension more easily.

Next, you need to choose a pension plan. There are several options, such as self-invested personal pensions, defined contribution schemes and stakeholder pension schemes. Before deciding on a plan, you'll need to carefully review any fees or charges involved, rules of contribution and where your money will be invested.

For more information, see HMRC's resource on planning your retirement income and pension for the self-employed.

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How do I start a pension?

If you're setting up a private pension, you may want to start with tracking down any old workplace or personal pensions you may have, so as to consolidate them into your new pension plan. This allows you to manage your pension more easily.

Next, you need to choose a pension plan. There are several options, such as self-invested personal pensions, defined contribution schemes and stakeholder pension schemes. Before deciding on a plan, you'll need to carefully review any fees or charges involved, rules of contribution and where your money will be invested.

For more information, see HMRC's resource on planning your retirement income and pension for the self-employed.

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How do I make pension contributions through a Limited Company?

As a limited company director, you can make pension contributions as an individual (as an employee), as well as through your company (as an employer).

Most directors make pension contributions from their company. This is a tax efficient approach, as employer pension contributions are an allowable business expense, which means that your company doesn't need to pay corporation tax on pension contributions made.

You won't need to pay tax on your contributions, as long as it falls below your annual allowance (capped at £40,000 for 2020/21), and your pension benefits doesn't exceed the lifetime allowance (£1,073,100 for 2020/21).

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