- What can a SSAS invest in?
- Can I invest my pension in property?
- What can a SIPP invest in?
- What are allowable SIPP and SSAS investments?
Invest your pension at your discretion in asset classes including:
SSAS & SIPP Pension Investments
- Property
- Gold
- Stocks and Shares
- Unconnected third party businesses
What can a SSAS pension invest in?
If you are a company director, legislation afforded to you means you can access your pension funds at any age and invest them at your own discretion in any HMRC allowable investments. But what can a SSAS pension invest in? SSAS pension investments can include everything other pensions can invest in and much more. Unlike traditional pensions, you do not have to rely upon the volatile stocks and shares market and the decisions made by your pension providers. Company Directors are allowed, within HMRC rules, to make many different types of allowable SSAS investments.
What can a SIPP pension invest in?
Unlike the SSAS, you can have a SIPP even if you are not a company director,. A Self-Invested Personal Pension (SIPP) does not offer quite the same level of flexibility and control as the SSAS. For example, a SSAS is able to have multiple members of the scheme and all members are trustees. Legislation afforded to you means you can access your pension funds at any age. There are many allowable SIPP investments and you can invest in them at your own discretion.
Both the SIPP and the SSAS can make many different types of investments including:
- Commercial Property
- Green Investments
- Gold
- Shares
- Agricultural Land
- Loans to an unconnected third party
- Loans to the company
- Unit trusts
- Gilts
- Industrial units
SSAS Beginners
SSAS FAQs
…plus many more investment asset classes, by using private or former employer pensions.
A SSAS pension is the most flexible and effective business and property pension…
and was created exclusively for company directors in the UK. With a SSAS pension, you have access to every type of investment that is permitted according to the rules set out by HMRC. The flexibility afforded to you by a SSAS pension is reflected in the vast range of investment options it offers.
TLPI are business, property and investments pensions experts,
specialising in SSAS pension solutions. TLPI work with a number of SSAS pension providers, each with specific criteria regarding the types of SSAS investments you can make. With such a variety of investments at your disposal and investment returns to benefit from, a guide to your options when it comes to investing with a SSAS pension is an ideal place to start when looking for the best pension investments. When looking at how to create your own pension, the asset classes that you would like to invest in and the options for managing your own pension, the SSAS is second to none. What a SSAS can invest in might surprise you!
There are many additional benefits to the SSAS pension,
including enviable tax relief strategy options, savings on inheritance tax, business growth strategies including the ‘loanback’ facility, and much more.
Property Investments
Property has long been seen as one of the safest investment options available due to its relatively solid appreciation value. As such, property investment remains a popular choice for many a retiree.
In the Office for National Statistics’ (ONS) latest Wealth & Assets Survey of all regions (with the exception of Scotland), the most profitable method of retirement saving for non-retired adults was property — and by quite some margin. Therefore, it likely won’t come as a surprise to hear that it’s also a key investment option for those considering a SSAS pension scheme. A properly managed SSAS pension is also tax-free, meaning that you won’t have to pay Capital Gains Tax.
But how can a prospective investor take advantage of these impressive returns?
Property Loans
Enviable Fixed Returns
- Enviable Fixed Returns
- Annual Fixed Returns
- Terms of between 2 and 5 years
- Debenture registered against company assets for security
Property loans are a popular route to property investment with your SSAS pension scheme. Property loans present a hands-off investment opportunity for the members of a SSAS and allow each member to enter into a loan agreement on a development project with a property developer.
These loans provide the developer with the necessary funds to complete a project before selling or returning the completed project for a fixed return. It is in these returns that members of a SSAS plan will see their investment yield results. Typically, bonds range between one and five years, with returns on investment per annum.
Commercial Property
Tax-Free Rental Income
- Tax-Free Rental Income
- Buy Property or Land Using a Pension
- Obtain Business Premises
- Benefit From Capital Appreciation
Another option available for members of a SSAS pension is investing directly in the purchase of land and commercial property. While it can be tempting to look at residential property purchases as part of a SSAS plan, the rules governing which types of property investments can be entered into by members of a SSAS are strictly governed by HMRC — unfortunately, residential properties do not make the cut. These strict regulations mean that even though a residential property may be functioning in a commercial capacity, such as with HMOs, holiday lets and home offices, they cannot be classed as commercial property within a pension fund.
Business Loans (The SSAS Loanback)
As many property investors hold incorporated businesses, another route for investment is securing a loan from a pension fund into a member’s limited business. This means of investment provides the investor’s incorporated business with the funds to make residential property-related investments, which can be property deposits or refurbishment costs. However, it’s worth noting that these SSAS pension loans are also regulated by HMRC rules that must be adhered to. Please visit our SSAS loanback section to learn more/or download a guide here.
Gold
Investing in gold takes many directions. You can invest in physical gold, such as gold bars or coins. Alternatively, you may wish to invest in companies that mine gold, or perhaps in funds that track the price of gold. Gold is relatively rare and that doesn’t change, so many choose gold as they see it as a reliable long-term investment, particularly through times of economic turbulence.
As part of a strategy for investing your pension funds, whilst it can and does fluctuate in price, gold has historically performed extremely well for long-term investment, often outperforming other asset classes. For many, seeing gold investments as part of the pension strategy is reassuring and a stable, underlying asset for their retirement growth. Profit made on gold investment is free from income tax within the SSAS account. Strategies can be formed to align your SSAS with your business to achieve tax efficient and optimum growth strategies for both.
Stocks and shares
The stock market and shares are the traditional ‘go to’ for pension funds. However, this doesn’t mean you can only invest in stocks and shares via traditional pensions. There are still many advantages to switch to a self-administered scheme, even if you wish to invest in stocks and shares yourself.
Switching to a SSAS scheme, and investing in stocks and shares can be a very successful SSAS strategy. Many choose to diversify by switching to a SSAS and only investing a portion of the funds in stocks and shares, the rest being invested elsewhere.
As with other asset classes, profits made by your stocks and shares investments are free from income tax, within the SSAS account. In addition, as a SSAS is managed by you, the company director, a SSAS can be aligned with your business to create extremely tax efficient strategies to save tax for you, your company and your retirement funds.
Green Investments
An extremely popular asset class is Green Investments. Green investments are responsible investments in company that provide or support environmentally friendly products, services and projects. This could include sustainable energy, green energy stocks, recycling and power generation projects, wind power, solar energy, green transportation, organics, and many more investment opportunities.
Investing your pension in socially responsible investments is permitted, using your SSAS scheme, and profits achieved within the pension are free from income tax. By choosing a strategy that facilitates your interest in green investments, and integrating it with your business, via the SSAS, it can be extremely tax efficient and profitable for you, your business and your pension funds.
Other Investment Options
The above are just the most popular investment avenues for your pension funds and you don’t necessarily have to pick just one! Diversifying your pension investments is a route many take.
- Commercial loans: This includes both secured and unsecured loans to unconnected UK limited companies.
- Equities: The typical stocks and shares found in most standard pension funds
- Government gilts: These are fixed-interest securities, usually offering a low fixed return
- Corporate bonds: These are fixed-interest securities offered by companies, which typically provide a slightly higher return than gilts
- Foreign equities: Foreign equities are stocks and shares traded on a recognised overseas stock exchange
- Authorised unit trusts: These are pooled funds that do not hold residential property
- Deposit accounts: A SSAS pension can be deposited into an account with an authorised financial institution
- Hedge funds: These are pooled investments generally made by financial institutions, such as insurance companies and banks
- Unit trusts: These are equity investment funds generally managed by insurance companies
- Gold: Members can invest in Investment Grade gold bullion (subject to conditions)
- NS&I: National Savings and Investments include premium bonds and are considered to be a low-risk and low-return investment
In closing, a SSAS pension is often a preferred choice for those looking for increased flexibility and control over their pension funds, as members have the ability to decide exactly where they focus their investment. For this reason — along with the highly attractive nature of property investment with a SSAS — many people tend to move their pension funds from Self Invested Personal Pension (SIPP) schemes and company and personal pensions to a SSAS.
With ONS studies showing that 79% of retired households with private pension income have a disposable income 1.6 times higher than those without private means of investing in a pension, private pension plans are becoming increasingly appealing.
If you are looking to achieve greater control over and growth from your existing or frozen pension accounts, a SSAS offers a viable solution. Its flexibility allows you to make multiple investments, whether you’re looking to invest in stocks and shares, property, gold or other asset classes.
Clear understanding
SIPP and SSAS pension schemes have a broad range of investment opportunities. There is much to consider, such as the term of investment versus the return and the quality of the security to back up your investment. Therefore, investing your pension in property or bonds can only be done when all of the information is clearly understood.
Expert information
We are experts in this field and have information on the different options available. From commercial property to investments that offer fixed returns paid quarterly, bi-annually or annually, we can provide guidance on the rules, regulations and benefits of the SSAS pension. We also have access to independent due diligence reports and reviews.
