Making pension assets work harder

When you run a business and want to invest and expand, getting the right capital in place can be complicated. Logic Wealth Planning helped one growing Lancashire firm utilise pension assets to help progress their ambitious plans…

Mayer Skip & Excavation Hire Ltd started as a family-run business working on small projects in the 1990s. They quickly upscaled to offer excavations, site clearance and skip hire, as well as being a leading supplier of reclaimed materials and top soils.

It’s a bold claim, but you can understand why they like to call themselves THE Lancashire Company for Excavations, Site Clearance and Skip Hire!

Brothers Wayne and Paul Mayer have always been keen to push boundaries and develop the company to its maximum potential. When they identified further land opportunities, they needed assistance getting the right borrowing in place.

Logic Wealth Planning has been advising the brothers for over two decades. The personal planning advice originally given concerned pensions, and the work put in place many years ago would ultimately help the business achieve their financial goals.

Financing business growth

As the chance to branch out became a real possibility, it was a case of talking to the right team of advisers. There was only one point of call.

Wayne Mayer said: “We’ve known the team from Logic Wealth Planning for nearly twenty five years. It’s a long-term relationship built on trust and friendship. When we drew up plans for the next phase of growth they were the obvious choice to get advice about funding the scheme.”

After considering various commercial premises around Rochdale and Bury, the former recycling centre in Heywood became available. Due to a council cost-saving drive, the facility was earmarked for closure in 2012. The site was a perfect fit for the Mayer business, but came at a cost.

Yianni Theodorou, Logic Wealth Planning MD, said: “We recommended that the brothers set up a small self-administered pension scheme (SSAS), with AJ Bell in Manchester. It was necessary to pool all available pension assets of the brothers to fund the purchase.”

Pension planning

The combined value of both pension schemes was just sufficient to fund the purchase. There was no need for additional bank borrowing. It was a stroke of luck, at just the right time. The numbers added up because of the good performance from their investments over the years, coupled with regular additional funding to the schemes.

Yianni added: “AJ Bell are experts in providing SSAS and self-invested pension schemes (SIPP), and renowned in the marketplace for having an excellent team of people who know their stuff!

“In simple terms, an SSAS is an occupational pension scheme designed for small companies. They are great for family-owned businesses and provide a lot of flexibility for the Directors and members of the SSAS.”

Commercial property purchase is one main benefit, along with director loan-back facilities. This allows the directors to take out loans funded by the SSAS to assist with further business growth. Another benefit is that the business occupies the premises from the SSAS. It then pays a market rent, thereby boosting the SSAS assets even further.  It is a very tax efficient way of pensions planning.

Exciting plans for the future

Purchasing the additional premises was just the beginning. With a rapidly-growing fleet of lorries, over 350 skips, seven “diggers” and three Loading Shovels. As a result, the business certainly needed expansion space.

Wayne said: “Logic Wealth Planning did some great work that enabled us to buy the new facility using our pensions.

“We’re midway through the development, building a new vehicle workshop, a large storage area, plus a weighbridge.”

With the resources increasingly scarce, the market for reclaimed and recycled building materials is growing fast. Consequently, Mayer’s recycling team processes as many building materials as possible, saving precious resources and saving customers money.

Crucially, a redundant site is being brought back to life. Wayne added: “There’s a long way to go but it’s been made possible thanks to the advice we took from Yianni and the Logic Wealth Planning team in Heywood.”