What is a SSAS Pension?

What is a SSAS and why have a SSAS?

A Small Self-Administered Scheme (SSAS) pension is a type of UK pension in the form of a tax-efficient scheme, exclusively for business owners. Why have a SSAS? By switching to a SSAS you can take control of your pension funds and invest them at your own discretion, in your business and property.

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What is a SSAS? Why have a SSAS?

A comprehensive guide to pension control, investing in Property and reducing Corporation Tax and Inheritance Tax

About SSAS pensions – what is a Small Self-Administered Scheme?

The Small Self-Administered Scheme (SSAS) is a corporate pension scheme that was devised by government to help business owners align their pensions with their business strategies. It is available to UK business owners. The key feature of the SSAS is that it gives business owners control and flexibility and full discretion over how they invest their pension funds. Unlike traditional pensions, the SSAS can invest in property. There are defined property categories that a SSAS can invest in.

Below you can read more about the pros and cons of switching to a SSAS. It is an extremely powerful pension scheme for those who are eligible to have one and can offer a great deal of control in creating innovative strategies for your business and family. A SSAS can also be combined with other tax planning products, such as the Family Investment Company to achieve even greater tax efficiency.

Are you looking for options to invest for the future?

A Small Self-Administered Scheme (SSAS) is a pension scheme that would usually be set up by a limited company. It is normally set up on a defined contribution/money purchase basis. SME business set up the SSAS which is run for the benefit of the owner as well as other company directors/key employees and/or family members. A SSAS is a type of Occupational Pension Scheme with several advantages. We are often asked, what are the benefits of a SSAS pension and the answer is extensive. As well as the same benefits traditional pension offer, a SSAS has much more control and flexibility to allow you to achieve your aims and goals, including increased investment choice and power, tax efficiency, business and pension alignment and much more.

This type of scheme is an attractive option for investors and business owners because it can be tax-exempt. This includes Capital Gains Tax, so investments in property can generate substantial returns. Contributions to the SSAS also receive tax relief (provided some conditions are met). On this page, we will delve into what SSAS is and how to determine if it is the right option for you.

Why start a Small Self-Administered Scheme pension (SSAS)?

The first question we are often askes is, ‘why should I have a SSAS?’ A SSAS, properly managed, is a tax-efficient retirement plan. In the past, SSAS were set up by directors of limited companies for the benefit of specific employees. Since pension simplification, partnerships and families have also been allowed to start a SSAS. A small number of family members may also join an established SSAS.

Members of a SSAS have more control over investment decisions than is usual for pension schemes. It is possible to invest wisely and make a significant return on your investment.

What makes a SSAS an attractive option?

One of the most attractive USPs for many investors is the ability to take out a loan from a SSAS which can be injected into their limited company for justifiable purposes. However, there are strict rules on how these loans can be administered. These pension loan rules are set and stipulated by the HMRC.

  • The maximum loan term is five years
  • Interest charged on the loan must be at least 1% above the average base lending rate
  • The loan must be secured as a first charge against an asset (or assets) of at least equal value to the loan, plus the loan interest
  • The loan cannot be more than 50% of the net value of the scheme assets
  • Repayment of the loan must be made in equal annual instalments
Graph - Invest your pension in stocks and shares

Pension transfers and combining pensions

Consolidating your pot is another advantage of the SSAS. By transferring your pension into one pot (consolidating your pensions), you make it easier to manage, and reduce the paperwork and statements and it is far easier to keep track of your pension funds. You are no longer dealing with multiple accounts and pension companies and you have control of your whole pension pot. The consolidated pot gives you far more investment potential, of which you are in control. With a SSAS, you are also able to invite other family members or key company members to join the SSAS and pool pensions to further increase investment power and options.

  • Transfer pensions and consolidate into one pot 
  • Greater investment choice and power
  • Less paperwork and reduce the number of admin charges
  • More transparency over pension funds
  • Pool pensions with family members or key company members

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