My retirement pot helped boost my firm’s cashflow
NEIL Afram was saved from a catastrophic tax mistake when he needed money from his pension to buffer the finances of his air conditioning company, Space Air.
Raised in Iraq, Neil moved to the UK in 1971 with a mechanical engineering degree and found success after setting up his business in 1980 with nothing but a £5,000 bank overdraft. By 2001 the company had a £30million turnover.
But the market slowed in recent years and despite the company having strong assets, Neil needed immediate cashflow. He was prepared to use new pension freedom rules to withdraw £150,000 from his pension – which would have triggered a 40 per cent tax charge.
Fortunately he was stopped in time by his financial adviser Craig Harrison, of Creative Wealth Management, based in South London.
Neil, 67, is a father of three, grandfather of four and an avid golf fan living in Guildford, Surrey. He says: ‘I wanted to withdraw all of my money. But I was advised by Craig that I could borrow from my pension for my business instead.’
He used something called ‘pension-led funding’ to tap his pension for cash. It was a complex process and involved transferring funds into a selfinvested personal pension, which he did with help from Clifton Asset Management.
Neil adds: ‘It was a solution that was properly structured and largely tax free. It gave me flexibility, knowing the business will be able to pay it back.
‘But advice is clearly important for pensions because it exposes you to the mechanics of how to use it – which is especially useful when you are still working.’
To find out more about the strategy Neil used visit Clifton’s Pension-led Funding website.