Lack of planning can delay your retirement

Published in Business Eye in August 2025. 

For many business owners, retirement planning is often overshadowed by the immediate demands of running and growing a company. It’s a common blind spot—some assume their pension will take care of itself, while others defer the issue entirely. But your pension isn’t just a standalone product; it’s a cornerstone of your overall financial planning.

A well-managed pension can be the difference between financial freedom and financial fragility in later life. While the idea of engaging with long-term financial planning can feel daunting, postponing it only increases the risk of falling short. Your pension deserves regular attention—reviewing it periodically as part of your financial plan can significantly enhance its value and ensure it aligns with your broader goals.

There are some key steps you can take to help ensure you can retire when you want to.

What is your retirement number?

A key consideration is the cost of your desired lifestyle. The closer you are to retirement, the easier it is to work out.

Your retirement number is the capital you require to generate the income you need. The earlier you know your number, the more time you have to adjust your pension contributions and investment strategy.

Make sure the advice you get is personal

Most pension arrangements offer a default investment strategy for individuals who don’t wish to make a specific investment choice. Under a standard pension arrangement, as you approach retirement, your funds will move from higher risk assets into lower risk ones.

While this may appear sensible, an overly cautious approach may result in lower growth. The fund transition does not account for the prevailing economic and market conditions. Your financial plan should be aligned to your life goals beyond your retirement date.

Only having a rough idea of the value of your pensions or how many pension pots you have could result in missing out on growth over the longer term. It’s worth considering consolidating your pension accounts to streamline your income withdrawals in retirement.

For a business owner, making pension contributions is one of the most tax efficient ways to transfer company funds into personal wealth. Getting expert advice can ensure you are maximising your allowances and reducing your current tax liability.

Don't underestimate how much money you will need in retirement

This will vary from person to person and will depend on factors including when you plan on retiring, one-off costs when you retire, your health and your desired lifestyle. Whatever your target for retirement income is, the very first rule of retirement planning is to start as early as possible.

The state pension, for those who qualify, is less than £12,000 per year, significantly lower than what many would require to maintain their desired lifestyle in retirement.

Stress test your assumptions

Your retirement number is only as reliable as the assumptions it’s based on. If you don’t test it, you risk underestimating how much you’ll need.

A cashflow projection will demonstrate the longevity of your fund. A good cashflow will include scenario-based testing for market corrections, inflation and unexpected expenditure. Your cashflow should be a living document which is updated when any of your assumptions change.

You wouldn’t run your business without a clear strategy. The same principle applies to your personal wealth. Without a plan, you risk drifting off course; with one, you can achieve the retirement lifestyle you want.

To learn more and get advice on how we can help you identify the right solutions for you contact us for more information at www.davyuk.co.uk/get-in-touch.