PENSIONS

SSAS

Tailored pension plans for a safe future

What is an SSAS?

A Small Self-Administered Scheme (SSAS) is a type of occupational pension set up by a single sponsoring employer, most commonly used by company directors and senior employees as part of their long-term retirement planning.

Each employer can normally establish only one SSAS, with membership limited to a maximum of 11 individuals. These members are usually key decision-makers within the business, which allows the scheme to be closely aligned with both personal retirement goals and wider company objectives.

Control and trustee responsibilities

One of the defining characteristics of an SSAS is the level of control it offers. Members typically act as trustees of the scheme, either individually or through a corporate trustee structure. This gives them direct influence over how the pension assets are invested.

With this control comes responsibility. Trustees have legal and fiduciary duties to act in the best interests of all scheme members and to ensure the scheme operates in line with pension legislation and HMRC rules. Professional administration and advice are therefore essential to manage compliance and governance effectively.

Contributions, limits, and tax treatment

Contributions to an SSAS can be made by both members and the sponsoring employer.

Member contributions may qualify for personal tax relief, subject to the standard pension limits and allowances. Employer contributions are often treated as a deductible business expense for corporation tax purposes, provided they satisfy HMRC’s “wholly and exclusively” test.

As with other pension arrangements, contributions are subject to the Annual Allowance, and unused allowance from previous years may be carried forward where conditions are met.

Investment flexibility

The primary attraction of an SSAS is its broad investment freedom, which is significantly wider than that available within most personal or workplace pension schemes. Members can also combine their individual pension funds, allowing for larger or more strategic investments.

Common SSAS investment options include:

Commercial property
An SSAS can acquire commercial premises, which may then be leased back to the sponsoring employer at a commercial market rent. This can provide the scheme with a rental income while allowing the business to operate from property owned by its pension arrangement.

Loans to the sponsoring employer
The scheme can lend up to 50% of its net asset value to the sponsoring employer. These loans must meet strict HMRC conditions, including requirements around security, interest rates, and repayment terms.

Other permitted investments
SSAS funds can be invested across a wide range of assets, including quoted shares, cash deposits, insured funds, and shares in certain unlisted companies.

There are, however, clear restrictions. Investments in residential property or tangible movable assets, such as artwork, antiques, or vehicles, are prohibited. Breaching these rules can result in significant tax charges and penalties.

Accessing benefits

When it comes to retirement benefits, an SSAS broadly follows the same rules as other defined contribution pensions.

Members can usually access their pension from the minimum pension age, take up to 25% of their fund as a tax-free lump sum, and use the remainder to provide income through options such as drawdown or the purchase of an annuity. On death, any remaining funds can normally be passed on to beneficiaries in line with the scheme’s rules and prevailing tax legislation.

SSASs ARE REGULATED BY THE PENSIONS REGULATOR. THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED. TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.