Can I take money from my limited company to pay for a pension?

17 April, 2023

Question by Sue

Answered by Steve Kilfoyle

Hi Sue, in short, yes. This is one of the most tax-efficient ways to invest into a pension. Effectively you would get no personal tax relief on the contribution (Should you invest £100 from the limited company it would go into the pension as £100) but your payment could be offset against your corporation tax bill. Therefore you do not draw any money via salary or dividends, therefore, being able to keep the payment away from any personal taxation. You must consider your own personal allowance, this was increased from £40,000 to £60,000 in the recent budget to come into force in tax year 23/24.

Answered by

Steve Kilfoyle

Financial Adviser

I work for a multi-award winning Chartered firm based in the South East and have been an adviser for 22 years. I provide holistic financial advice and pride myself in delivering straight-forward, plain speaking advice tailored to individual clients' needs. Financial planning can seem daunting, but that's what advisers are here for - I am able to provide an impartial view.

My clients often have many different financial products, all of which contribute to their financial future; a few pensions, ISAs or life cover policies that they might be unsure about. It's my job to pull the pieces together and formulate a wider picture, both of your present circumstances and potential future - and I love that part of my job!

I enjoy working with company directors who need holistic advice for both their personal circumstances and their business - making sure that financial planning incorporates both is so important, as one doesn't exist without the other. There are many tax efficient plans available that can help reduce tax for both parties.

Outside of work, I have two daughters who keep me on my toes and enjoy most sports. I am a lifelong Arsenal supporter, although I tend to keep that fairly quiet! I also love to travel and experience new places.

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