Running a successful business is hard work, so it’s understandable that most entrepreneurs are much more focussed on the here and now rather than planning for their retirement.
As business fortunes fluctuate, this is where carry forward can come to the rescue. In more prosperous years, it allows clients to play ‘catch-up’ by paying much larger contributions into their pensions to compensate for underfunding in previous years when available funds were invested in their business. This not only boosts their retirement funds, but could also save them a lot of tax too.
Some clients may see their business as their retirement fund, but not everyone will be able to rely on this; things may not work out as planned. Saving into a private pension alongside their business should prove a less risky strategy.