Fiducia demystifies investing for new business owners

Lauren Peters, senior adviser at Fiducia Wealth Management, recently delivered an Investing 101 presentation as a guest speaker at a networking event in Chelmsford.

The presentation was aimed at helping new business owners to get started with investing, explaining the basics around opening pension and ISA accounts and what to look for when picking funds.

“As a group, business owners typically neglect their own finances”, Lauren said.

“That’s partly because they have no employer to do it for them; it’s up to them and partly because they are very busy growing their business so there is little time to concentrate on building their personal wealth.”

“Getting started is the first hurdle. Often, it’s difficult to know where – and how – to start. But, those that do get started can pick up a number of tax benefits along the way, as well as peace of mind that they have some nest egg for the future.”

Most employees are pension members in the UK, following the auto-enrolment rules that have been phased in over the past several years.

Self-employed people lag behind when it comes to pension provision, often relying on the sale of a business for their retirement, which may or may not have significant value in the future.

Lauren said; “Delaying setting up a pension is costing business owners thousands in missed tax reliefs. The self-employed are able to claim tax relief on their own pension contributions whilst directors of incorporated companies can make employer as well as employee contributions to their own pension. Employer contributions can be offset against corporation tax.”

Main points to ‘take away’ from the presentation

• Business owners / self-employed usually neglect their own pension and investment needs, but there is no employer to do it for you, so it’s even more important that you take action.
• You are busy, but your work will never be done. Make time for yourself. You do this for your clients; why are you less important?
• The government give you tax relief for making pension contributions – free money, why give it to the tax man when you can give it to your future self?
• But, this is not entirely altruistic by the government, tax relief is an incentive to invest in pensions. Subtext: the government wants (and needs to!) reduce the burden on the state.
• Every year, there are rumblings that the government may reduce or even stop people from being able to get tax relief on their contributions – there is an argument that says ‘get it whilst you can’. Say you put in £3,000 over the course of a year (£250 a month), tax-relief tops it up to £3,750. Higher rate taxpayers get an additional 20% relief.
• We can already see the government reducing their responsibilities towards the populace – chipping away at the state pension and increasing the age at which you can access it.
• A pension can be opened from as little as £20 a month.
• Getting started as early as possible is the best way to plan for a decent retirement – one of the most common things I hear from clients is ‘I wish I had started saving for retirement earlier than I did.’

Lauren is available to deliver seminars to business owners and employees on pensions, investing and taxation. Contact Fiducia Wealth Management for more information on how to book a seminar.