The Talk I Wish Someone Had With Me
I wasn’t always a financial planner.
Before this career, I was the founder and managing director of a small regional newspaper. It did well — but I had no clue about personal finance. I didn’t care. I was too busy running the business, raising six kids in a modern blended family, and juggling the day-to-day chaos of life.
Every year, there’d be profit left over that I didn’t need personally. And because I didn’t know what else to do with it, I just paid the tax… and spent the rest on fun but pointless stuff. Depreciating toys. Things to impress people who didn’t care.
I didn’t know better. My accountant would mention pensions, but I had no idea what he was on about.
Now I do.
And now I’ve made it my mission to help business owners like the me of yesteryear — the ones working hard, taking risks, making sacrifices… but not looking after their future self.
Because one day, that future self will be your present self. And you’ll want to thank the version of you that made a plan.
Business Owners Sacrifice So Much
We give up time. Energy. Sleep. Weekends. Holidays. We take risks that others wouldn’t.
But here’s the reality: you won’t run your business forever.
You probably don’t want to.
What you do want is the lifestyle it gives you — the freedom, the choices, the income.
But if the business stops… what pays for that lifestyle?
You don’t need to have all the answers today. But you do need to start thinking like someone who’s going to stop one day.
And that’s where pensions come in.
Let’s Talk About That £60,000
Say you’ve got £60,000 profit in your business. You’ve taken your salary already, and this is spare.
What happens next?
Option 1: Take It as a Dividend
First, the company pays 25% Corporation Tax = £15,000*
That leaves £45,000 to pay out as a dividend
As a higher-rate taxpayer, you’ll pay 33.75% Dividend Tax = £15,187.50
(although you would have a dividend allowance, we are assuming this has been used already)
Your take-home = £29,812.50
So out of £60,000 profit, you keep just under £30k
That’s over 50% gone in tax.
Option 2: Make a £60,000 Employer Pension Contribution
Instead of paying the dividend, have the company contribute the full £60,000 into your pension.
It’s fully deductible, so the company saves £15,000 in Corporation Tax
You save another £15,187.50 in Dividend Tax
That’s a total tax saving of £30,187.50
Effective saving = 50.31%
The money stays yours — just in a smarter place. One where it grows tax-free and can be drawn with proper planning later.
Stop Giving Half Your Profit to People You Don’t Like
Instead, pay your future self first.
Because one day, that future self will be you — tired of working weekends, dreaming of slowing down, and grateful that someone had the foresight to plan ahead.
Pensions aren’t just about retirement. They’re about freedom. Control. Options.
They’re about making sure your business success actually funds your future lifestyle — not just your current one.
*A Quick Note on Corporation Tax
The Corporation Tax rate is banded now:
19% for profits under £50,000
25% for profits over £250,000
Tapered in between
In this example, I’ve used 25%, assuming higher profits — but the principle still works at lower bands, especially when profits are consistent.
The Bottom Line
I wish someone had explained this to me when I was running my business. I wish someone had said:
“Stop throwing away money in tax. Fund your future instead.”
So now I’m saying it to you.
If you're making decent profit and don’t need to take it all today, use it to build the future you want — not the one you’ll settle for.
This article is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.
Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future.
The Financial Conduct Authority does not regulate some aspects of Tax Planning