Hartsfield Trustee Services
"It's the little details that are vital. Little things make big things happen." John Wooden

What is a SSAS pension: how it could help you and your business

January 4, 2019 12:26 pm Published by

If you’ve heard of a SSAS or a SSAS pension and aren’t sure what it is, here’s the official definition: it’s a small self-administered pension scheme and is a “type of employer-sponsored defined contribution workplace pension that can give the employer additional investment flexibility”, so says the Pension Advisory Service.

But behind the catchy – dare we say ‘sassy’ – name is a pension option which has a long, distinguished career and brings measurable benefits to business owners and directors.

The SSAS has been a popular choice since it first came into being in the 1970s. That’s quite a track record, given the mercurial nature of the pensions industry.

Not only that, schemes are registered by HMRC and they are regulated by The Pensions Regulator. This official endorsement should offer peace of mind to anyone thinking of opting for this type of pension.

So what are the benefits of the SSAS Pension?

A big attraction of a SSAS pension for company owners and directors is the flexibility it affords. Unlike other types of pension, the SSAS offers a diverse range of investment options which means it can support your business while at the same time building your retirement fund.

For example, a company could use the SSAS funds to buy its premises, then lease them back. The rent the company pays is still an operating expense, but the rent provides a return for the company’s pension rather than a third-party landlord.

Also, the SSAS is a trust-based scheme which means that, should the company get into financial difficulties, creditors do not generally have any call on the assets held in the scheme.

As a rule, contributions made by the company are exempt from Corporation Tax but, unlike other options, the funds remain available to the business by means of a loan back from the SSAS.

In our experience, it’s this level of control and flexibility which appeals to business owners and company directors.

But a SSAS shouldn’t be regarded just in terms of a vehicle to help the company. It is an excellent pension model in its own right, because:

  • Any growth in the assets is free from Capital Gains Tax
  • As a trust, the assets are generally exempt from Inheritance Tax
  • Personal contributions made could receive tax relief through self-assessment.
  • Like any other pension, funds can be withdrawn with up to 25% tax-free from age 55.

A SSAS won’t suit everybody, and we always ask people to seek independent financial advice before going ahead. Indeed, it is only available to company directors, owners and key members of their staff. But in every other respect it acts like a personal pension, but turbo-charged for the business world.

For more information about setting up a SSAS please get in touch with the team at Hartsfield Trustee Services.

Categorised in:

This post was written by Joy West