Build Your Future: A Plain-English Guide to UK Pensions
On 16 September 2025, Polish Business Link hosted a webinar with our member Piotr Kasprzak from Wiltshire Wealth Management. Piotr spoke about the three types of UK pensions, how tax relief works, and why business owners should plan early. Below is a clear, plain-English summary with quotes from Piotr.
Watch Video: Navigating UK Pensions
The three types of pensions (in simple terms)
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State Pension – Paid by the government when you reach State Pension age. Your amount depends on your National Insurance (NI) qualifying years. Check Your UK State Pension.
“State pension in the UK is based on the national insurance qualifying years… You need at least 10 years to qualify, and 35 years to get the maximum.” — Piotr
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Workplace Pension – Set up by your employer (auto-enrolment). You pay some, your employer pays some.
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Private (personal) Pension – A pension you set up yourself. You choose where the money is invested and how you draw it later.
“With a private pension you have full control—how it’s invested, and how you take money out in the future.” — Piotr
Key numbers mentioned in the webinar
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Max State Pension (current figure discussed): about £230.25 a week (if you have 35 NI years).
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State Pension age: 66 now; moving to 67 and, for many younger people, 68.
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Personal allowance threshold to watch: £50,270 (basic vs higher-rate income tax).
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Annual pension allowance (discussed): £60,000 a year (or 100% of earnings, whichever is lower), with carry forward of unused allowance from the last three tax years.
“When allowances are available, grab them. We don’t know what the rules will be in future.” — Piotr
“We often create cashflow modelling for our clients up to the age of 100, so they can see how long would their pot last for.” — Piotr
(Note: Rules and figures can change. Please check your latest position or speak to a qualified adviser.)
Why pensions are powerful for business owners
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Big tax relief on what you pay in
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If you’re a basic-rate taxpayer, the government adds relief on your contributions.
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Higher-rate and additional-rate taxpayers can claim more relief.
“From that point of view it’s a no-brainer—you put money in, and the government boosts it.” — Piotr
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Company contributions can cut corporation tax
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Your limited company can pay into your pension and usually treat it as an allowable business expense.
“It’s designed so your business pays the pension for you. That reduces profit and reduces corporation tax.” — Piotr
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Tax-free growth and tax-efficient withdrawals
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Money grows tax-free inside the pension.
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Normally, 25% of your pot can be taken tax-free; the rest is taxed at your rate in retirement, which may be lower.
“We try to keep withdrawals below £50,270 so clients aren’t pushed into higher-rate tax.” — Piotr
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Avoid the “60% tax trap”
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Between £100,000–£125,000 of income, you can lose your personal allowance and face an effective 60% tax.
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Planning and pension contributions can help you avoid that.
“With good planning you retain more of your earnings—by putting them in your pension instead of sending them to HMRC.” — Perry Scott (SJP)
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Action steps for entrepreneurs (start here)
Check your NI record
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See how many qualifying years you have and if there are gaps you can fill.
Use your allowances
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Look at the £60,000 annual allowance and carry forward from the last three years.
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If you’re a director, consider company contributions before your company tax year-end.
“Don’t leave it too late—before tax year-end is key, or you can miss the window.” — Perry
Build the habit
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Set a monthly amount and stick to it. Increase it when business allows.
“It’s all about habit—regular saving into your pension.” — Piotr
Match your plan to real life
- Decide when you want to slow down or retire.
- Review your plan yearly; adjust for inflation, cash flow, and business changes.
Get advice on cross-border issues
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Many of us plan to spend time in Poland. Ask about the UK–Poland double taxation agreement and the best way to draw income if you move.
Get professional financial advice and plan your retirement.“There’s a double taxation agreement—you won’t be taxed twice. The question is how to optimize what you take and where.” — Perry
Simple examples (what “good” can look like)
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Company pays in before tax year-end
Your company pays a lump sum into your pension in March. You reduce profits, lower corporation tax, and boost your retirement pot. -
Avoiding the 60% trap
You expect income of £110,000 this year. Making a pension contribution can bring your taxable income below the threshold, protecting your personal allowance and cutting the tax bill. -
Mix of monthly + lump sum
Set a small monthly contribution for habit. Add a lump sum when cash flow is strong (e.g., after a good quarter or before tax year-end).
Final thought
Your business may be your “pension,” but markets change. A pension gives you a known, tax-efficient path to a secure future—on top of whatever you do with your company.
“Create a known outcome. Use the allowances now, and let your business contributions build your future.” — Perry
Disclaimer
The information contained within this presentation, does not constitute investment advice. It is not intended to state, indicate or imply that current or past results are indicative of future results or expectations. Full advice should be taken to evaluate risks, consequences and suitability of any prospective fund or investment. The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested. The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances. Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority. Wiltshire Wealth Management is an Appointed Representative of and represents only St. James's Place Wealth Management Plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group's wealth management products and services, more details of which are set out on the Group's website at www.sjp.co.uk/products.
