What percentage of your earnings do you clear?

[prozak]

In the right circumstances (not too far from retirement, modest cashflow requirements/high earning spouse), I think there is much to be said for the "Use your company as a quasi-pension" strategy.

Eg, earn £100K pa (say). After adjusting for flat rate VAT, paying a salary and some expenses, you might end up with profit before tax of £90K. Pay CT of £18K and a divi of £32K leaves retained profits of £40K pa. Accumulate this until you retire, say 15 years. You now have £600K in your company.

The obvious thing to do is to pay CGT of £60K and walk away with £540K. The alternative would be to carry on paying dividends to H & W (both now retired, no other income) of £38K each per annum for 8 years.

Or do 12 months working full-time abroad and pay it out as a tax-free divi (you obviously have to go to the right place to avoid local tax so probably only an option for that kind of money if it fits in with your retirement plans anyway).

PUMA

that has always been my plan A.

But more than happy to explore other solutions because plan A involves a load of cash sitting around not doing a lot....

[THEPUMA]

that has always been my plan A.

But more than happy to explore other solutions because plan A involves a load of cash sitting around not doing a lot....

The beauty of this is that you are not relying on entrepreneurs' relief so the company funds can be invested in whatever you want, subject to retaining sufficient liquidity to enable you to be paid the optimum annual dividend.

[Waldorf]

I agree with spreading your investments, but pension money is usually invested in the same things as an ISA etc - so not much spreading really.

I agree that you have limited control over most things, however with pensions, the requirement to buy an annuity is a major drawback.

I know that this requirement has been watered down, but my understanding is that this only applies if I can show pension INCOME of over £20K per annum, so I will need a mighty pot to do that and if annuity rates do fall, the required size of this pot will increase.

After much consideration, pensions are not for me.