A small self-administered pension scheme (SSAS) is an employer sponsored pension scheme provided by Insurance companies and other pension providers. It gives the Trustees, who are usually a small number of key people (directors or senior staff and members of the pension scheme) the ability to manage the investments of the pension scheme. It can be open to all employees and their family members, but the number of members is generally limited to 12.

All of the SSAS’ investments are held in the name of the Trustees – there are no ‘individual pots’ for each member, although each member is deemed to hold a proportion of the scheme’s assets.

Benefits of a SSAS

The main benefit of a SSAS is that the Trustees have more freedom on where the investments of the pension can be made. Subject to terms and conditions, it can:

  • Raise a mortgage to assist with the purchase of the company’s premises
  • Purchase the company’s trading premises and lease these back to the company
  • Lend money back to the company
  • Purchase the company’s shares
  • Borrow money for investment purposes

The drawing of a pension income from the SSAS is subject to the same constraints and taxation as any other defined benefit scheme (from the age of 55, tax-free cash lump sum, income depends on the value of the pension pot)

If you are considering a SSAS, we strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. Pension decisions are usually a major financial decision that requires the appropriate level of advice to make the right choice. In contrast, mistakes can be costly.To arrange for a no obligations, initial free telephone consultation click here.