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If you’re a business owner looking to reduce tax, build long-term retirement wealth, protect your family and business partners, our team at Capstone Financial can help.
Published 30/01/2026
Helping Steven Secure His Financial Future and Reduce Tax
Last year Steven and his business partner set up their own structural engineering business. Steven wanted to explore tax-efficient profit extraction and business protection options for his Limited Company. His accountant introduced him to one of our Financial Advisers, Alan Worthington.
The Challenge
- Recently left employment and had limited pension savings, which he had stopped contributing towards.
- Taking more income from his company than he needed, creating avoidable corporation and dividend tax.
- No significant protection in place for his family or business partner.
- Three old pensions sitting unmanaged in default employer funds.
Our Approach
1. Pension Contribution Strategy
- Began contributing £2,000 per month (£24,000 annually) as a company pension contribution aligned with his income level and business structure.
- Delivered an initial £6,000 saving in corporation tax (25%) over the company’s financial year.
- We worked closely with his accountant to balance contributions and dividend strategy for maximum tax efficiency.
- Designed a future roadmap to increase contributions as the business grows to help maximise pension allowances and reduce tax further.
This strategy not only reduced Steven’s net tax liability but also ensured surplus income was invested for future growth, to be able to enjoy his future retirement with desired travel and hobbies.
2. Existing Pension Review & Portfolio Choice
Following a review of existing pensions, Steven chose to bring together three old workplace pensions into a single arrangement aligned with his chosen portfolio. This move allowed:
- Streamlined retirement savings into one easy to manage place.
- Ongoing professional advice previously unavailable through employer schemes.
- Active involvement in portfolio selection for the first time, giving a sense of ownership and control over performance and growth of funds.
3. Business Protection Planning
- Capstone Financial recommended a relevant life plan to provide a lump sum payment in the event of his death as he only had mortgage insurance in place. A relevant life plan is a business expense for corporation tax and is not subject to National Insurance payments either, providing the cover meets the HMRC’s wholly and exclusively test. This can achieve significant tax savings compared to personal cover.
- Provides peace of mind for his fiancée and his business partner that if he passes away during the policy term then a lump sum payment will be made to maintain financial stability.
The Results
☑️ £12,075 initial tax saving achieved from company pension contributions.
☑️ Streamlined retirement planning with pensions consolidated.
☑️ Greater control and confidence through tailored portfolio selection.
☑️ Future security via plans to scale contributions and implement relevant life protection cover.
Client Feedback
“I always felt my pensions were just sitting there without much thought. For the first time, I can see how my business success and my retirement plans work together. Knowing I’m saving tax now while building long-term security makes me feel in control.”
The advice given to Steven was provided after a full evaluation of his specific needs, circumstances and requirements. The solutions provided may not be suitable for everyone and the information provided here does not constitute advice.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
Transferring pensions from other providers does not work in all cases. We would rarely look at transferring as a first option and would only be recommended in exceptional circumstances. Considerations such as guarantees etc would need to be viewed to ensure suitability
SJP Approved 30/01/2026