Key points
- Calculate the capital you need before choosing an exit route.
- Pension contributions and extraction strategy should be reviewed with a regulated adviser.
- Deferred sale proceeds carry risk — plan around what is certain.
- Personal and business planning should run in parallel.
Business owners need two plans: a personal retirement plan and a commercial exit plan. Problems arise when they are made separately.
For most employees, retirement planning is about pensions and savings. For business owners it is more complicated, because a large share of personal wealth is usually tied up in the company — and the company's value depends on how well it is prepared for the owner's departure.
Personal retirement planning
Your regulated financial adviser typically helps with:
- Pensions and pension contributions
- Investments and post-sale wealth
- Personal cash flow and income needs in retirement
- Estate and inheritance planning
- Protection and family considerations
Commercial business exit planning
Exit planning focuses on the business itself:
- Business readiness and saleability
- Succession and leadership
- Management strength and owner dependence
- Ownership transition and exit route
- Timing and preparation
Your business and personal retirement plans should meet in the middle
A financial plan may assume the business will release a certain sum by a certain date. An exit plan may show that the business needs three more years of preparation, or that the most suitable route pays out over time. Unless the two are reconciled, owners can find themselves selling too early, too cheaply or under pressure.
Coordinate commercial exit planning with your financial adviser, accountant and solicitor so that business and personal plans support each other.
This guide is general information only. It is not tax, legal, financial or employment advice. Always take advice from appropriately qualified professionals about your own circumstances.
My financial plan assumes sale proceeds on a particular date. What should I check?
Check whether the business can realistically release that amount on that date and in the form your financial plan assumes. Commercial preparation may take longer than expected, or the suitable exit route may pay over time. Reconcile those findings with your regulated financial adviser before relying on the proceeds to fund retirement spending.
Specialist resources
- Discuss value with an adviser — to understand valuation concerns in the context of your objectives before agreeing any specialist support
Sources
Rules and thresholds change. Check the current position at the source and take professional advice before acting. Citing official guidance is not a substitute for professional tax or legal review.