The 48-year-old knows that putting her money into a savings account – like an ISA – would give her more flexibility over when she withdraws her cash, but she says she’s convinced she’s taking the right option.
Speaking to The i Paper, she said: “I run a limited company, so prioritising pension contributions is a no-brainer from a corporation tax perspective.
Claire Holt, 48, has been running her own limited company for the past 14 years Source: Claire Holt
“So, I don’t have any ISAs. I’ve always favoured pensions, particularly since becoming a director.”
She will not able to access the cash until she is 57, as in three years’ time the age at which you can access your pension will rise from 55.
Contributing to a pension through a limited company can bring significant tax advantages as contributions can be treated as a business expense, and offset against a business’s corporation tax bill.
ISAs come with some tax benefits – you can put £20,000 a year into them and the profits you make from interest are not taxable – but you don’t get tax relief on paying into them.
Claire added: “I’ve got a great financial adviser, who also happens to be my husband. But we are careful. I’m naturally a saver, not a spender. I think balancing short-term flexibility and long-term growth is crucial.”
She explained: “I keep the working capital in the company, so it’s not all tied up in pensions. It’s about balance, and I’m comfortable with it.”
Aiming to take full advantage of compound interest, she made the decision to focus her savings entirely on her pension three years ago, after researching the most efficient ways to save for the long-term.
“The power of compound interest really works in your favour when you start early.”
Annie Shortland, 27, said she hasn’t abandoned ISAs completely Source: Annie Shortland
Currently, Annie contributes 5 per cent of her salary into her workplace pension every month.
But she also pays 10 per cent of her earnings into a separate self-invested pension pot too.
She said: “I haven’t completely abandoned ISAs, though. I still have a savings ISA for my emergency fund, with three months’ worth of salary in there. But beyond that, I’ve focused solely on my pension for the past three years.”
She continued: “I have my emergency fund in an ISA, which gives me peace of mind for short-term needs. But for anything long-term, my pension is the priority.
For both savers, pensions aren’t just about locking money away. They’re about tax efficiency, long-term growth, and building wealth that will serve them in retirement.
“As long as I keep setting aside money for the long term, I’ll be in a good position for the future.”
Claire echoes a similar sentiment. She said: “As long as I can find a way to balance short and long-term needs, I’m happy with my decision. Pensions are the smart move for the future.”
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