Case Study: Retirement Planning

Retirement Planning with a focus on family-owned business, pensions and commercial property

Client Profile

  • Client: male business owner
  • Circumstances: married, family-run business
  • Status: Managing Director of a successful limited company
  • Profession: precision engineer
  • Client aim: purchase an industrial unit to house equipment that is too big for his current premises; do this in a quick and cost-effective manner


The client’s business has been going for 30 years. Simon has worked with the business owner, James, for the last 16 years. Several of the industrial units on the estate are owned within James’ pension scheme; from some of them, he operates his business. The remaining units are rented out to generate income for the pension. Over the years James has bought commercial property, through his pension scheme, in view of his business needs. As a result of investing the rental income, the pension holds a mix of property, investments and cash.

The challenge: how to replace old equipment with newer, bigger machinery

James needed to replace some old equipment which was out of date and costly. However, the replacement machinery was too big to fit into the current space. Luckily, a bigger unit on the estate came up for sale, which could accommodate the new equipment. James is no stranger to buying commercial property, however, he wanted advice about how best to make the purchase quickly and cost-effectively.

Action taken by The Lost Coin Financial Planning Ltd

The unit cost £240,000. Simon recommended James use a chunk of cash from the pension scheme to purchase the unit quickly and mortgage-free. As a cash buyer, the transaction was low cost and progressed swiftly.

That wasn’t all of James’ property plans; he also wanted to extend another of his units for the total cost of £300,000. The cautious management of the pension scheme assets over the years enabled the client to do both. Ensuring that not all of James’ portfolio was tied up in property meant that when an opportunity arose, he had the flexibility and ability to move quickly.

The impact on the client: a positive commercial outcome

The impact was twofold.

First of all, the quick purchase meant James could order the new equipment and carry on running his business. He had confidence, knowing that when it arrived, it would fit into the unit and they could hit the ground running.

Secondly, the old machine was costing the business money. New equipment gave James peace of mind, knowing that there would be fewer breakdowns, lower service costs and a faster, more reliable turnaround. Key customers continued to be well served, which was good news for business.

The most important factor was that James took advice before taking action. Having sought Simon’s input, he could proceed with confidence, knowing that the course of action was best for him, his pension scheme and the business.

A clear understanding of James’ personality, preferences and aims developed over the years also played a key role. It meant Simon was able to give appropriate advice that was in line with the client’s values.

The most important thing is to pay into a scheme – or to create your own scheme, as James did. Of equal importance is to start doing this as soon as possible.


A word from Simon…

You might think that pensions are not for you.

If you’re a business owner, you might say, ‘I don’t need a pension! My business is my pension.’ That’s very well. However, it does rather depend on your business being functional if you’re not there. Where business owners find themselves in poor health and unable to run the business, the impact is stark. In that event, the business-as-pension model doesn’t look quite so appealing.

The most important thing is to pay into a scheme – or to create your own scheme, as James did. Of equal importance is to start doing this as soon as possible.

Why is it so important?

Even if you only pay in a small amount, on a regular basis, that will grow over time. And once you’ve started a pension, it’s there. According to current rules and regulations, you can back-fund up to the last three years of your pension – provided that you had a pension for those years.

Business owners should also bear in mind that an IFA can work alongside other financial and legal professionals. A triple-pronged attack with your accountant and legal expert gives a fully fleshed-out picture and means you receive thorough and professional advice. And that’s a far stronger place from which to make decisions than by following your gut.

As ever, it’s critical to seek independent financial advice before taking any action.

The Lost Coin Financial Planning Ltd welcomes enquiries; get in touch today for an initial consultation at no cost to yourself.

A pension is a long-term investment. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Your pension income will be affected by a number of factors at the time of taking benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation which are subject to change in the future.