Pension Freedom

Pension Freedom: A Source of Business Finance?

Pension Freedom: A Source of Business Finance?

Since the 6th April 2015, anyone over the age of 55 can use accumulated pension fund in any way they wish, including taking their entire pension pot out in a single lump sum. Small business owners looking for funding to support or grow their companies have been weighing-up the potential benefits that pension freedom might bring. However, the practicalities may prove less attractive. The new rules do not alter the fact that only 25% of an accumulated, untouched, pension fund is available tax-free. Any further withdrawals are subject to income tax in the year they are taken. For most small and medium-sized enterprise directors that will probably mean hitting the higher rate tax band of 40% or 45%. As with any type of funding, there are also other influencing factors to consider beyond the pe... »