Understanding the Basics of Pension Planning

Pension planning is often overlooked, especially as we establish our careers or build our businesses. At every stage of the journey, there is usually little time to focus on planning, yet this sets the foundation for when we can retire and the level of income we can expect to receive.

At Ifamax, we work with business owners and professionals to take away the stress of worrying about the future and to use the most tax-efficient ways to save for retirement.

What is Pension Planning?

Pension planning prepares for financial security during retirement by building a sufficient retirement fund to deliver the needed income. Everyone’s needs differ, and we will work with you to ensure you make the most tax-efficient savings.

There are different types of schemes, including:

  • Workplace pensions: You and your employer make contributions, often with the option to increase your own contributions.

  • Personal pensions are private savings plans to which you contribute. They are sometimes called Self-Invested Personal Pension Schemes (SIPPs).

  • State pensions: Funded through National Insurance contributions, the State Pension provides a guaranteed income from the government. The full amount typically requires 35 years of contributions.

  • Defined benefit schemes: Employer-provided schemes that guarantee a set income in retirement based on your salary and years of service.

Pension planning involves understanding all the different schemes you may have and creating a tailored plan to help you transition into retirement smoothly.

The Benefits of Starting Early with Pension Planning

tarting your pension planning early can significantly impact your financial future. Here’s why:

  • The Power of Compounding: The earlier you begin, the longer your money has to grow. For example, saving £200 a month from age 25 could grow to over £150,000 by retirement, thanks to compound interest.

  • Tax Relief Advantages: Pension contributions often come with tax relief, meaning your savings go further. For instance, higher-rate taxpayers can save £40 for every £100 contributed.

  • Avoiding the Cost of Delay: Starting later means significantly higher contributions are needed to achieve the same outcomes, increasing financial stress.

The graph below illustrates how starting early maximises your savings and reduces the pressure of catching up later.

Key Types of Pensions Explained  

Workplace Pensions 

These are schemes that all employers must offer. The main advantage is that your employer will also contribute to your retirement fund. You can increase your contributions above the minimum requirement.

Personal Pensions  

Personal pensions, including Self-Invested Personal Pensions (SIPPs), are private savings plans. They are ideal for self-employed individuals, business owners, or professionals seeking flexibility beyond workplace pensions.

State Pensions  

The State Pension is funded through National Insurance contributions. Your entitlement and the amount you receive depend on the total number of qualifying years of contributions, with 35 years typically required for the full amount.

How to Get Started With Pension Planning

Financial planning is the key to successful pension planning. It starts with understanding your aspirations and goals, assessing your savings, and identifying the best strategies to achieve your desired outcomes. At Ifamax, we’ll guide you every step of the way to create a plan that works for you.

Common Mistakes in Pension Planning and How to Avoid Them

The greatest challenge for many professionals and business owners is finding the time to focus on pensions. At Ifamax, we understand your unique situation and will:

  • Plan early to maximise tax benefits.

  • Regularly review your pensions to adjust for life changes and evolving goals.

  • Ensure all your plans align to deliver the future you envision.

The key to avoiding mistakes isn’t about perfection; it’s about assessing your current position and planning for what lies ahead. The earlier you start, the better your chances of achieving your desired outcomes.

Why Choose Ifamax for Pension Advice?

Ifamax has been helping clients for over 20 years. We work with business owners and professionals to create tailored financial plans. Four of our six advisers are under 40, so we’ll be here to support you long-term.

Don’t wait to plan for your future. Contact Ifamax today and let us help you secure the retirement you deserve.

Risk warning

This article is distributed for educational purposes only and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy, or investment product. Reference to specific products is made only to help make educational points and does not constitute any form or recommendation or advice. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.  


Past performance is not indicative of future results and no representation is made that the stated results will be replicated.

Ashton Chritchlow