A Small Self-Administered Scheme (SSAS) is a type of pension scheme in the UK designed for small businesses and company directors. It allows the members of the scheme to take control of their pension savings, invest in a wide range of assets, and make their own investment decisions. In this article, we’ll take a closer look at SSAS pensions and their benefits, as well as how they work and who they are suitable for. We offer clients the best investment property based on their needs here at Aventine Property.
What is a SSAS Pension?
A SSAS pension is a type of occupational pension scheme that is designed for small businesses, typically with less than 12 members. Unlike a traditional pension scheme, a SSAS is managed by the members of the scheme, who act as trustees and have control over how the pension fund is invested.
SSAS pensions are particularly attractive for business owners because they offer a high degree of flexibility and control over pension investments. The members of the scheme can invest in a wide range of assets, including stocks, shares, property, and even loans to the sponsoring employer.
How does a SSAS Pension work?
A SSAS pension is set up and administered by the company that sponsors it, typically a small business or group of businesses. The members of the scheme act as trustees, responsible for making investment decisions and managing the pension fund.
The members of the scheme can make contributions to the pension fund, as can the sponsoring employer. Contributions made to a SSAS pension are eligible for tax relief, up to certain limits.
Once the pension fund has been built up, the members of the scheme can use the fund to provide retirement benefits to themselves or other members of the scheme. These benefits can include a tax-free lump sum, an annuity, or flexible access drawdown.
What are the benefits of a SSAS Pension?
One of the main benefits of a SSAS pension is the high degree of control and flexibility that it offers. Unlike other types of pension schemes, the members of the scheme are responsible for making investment decisions and managing the pension fund. This allows them to invest in a wide range of assets, including property and loans to the sponsoring employer.
Another benefit of a SSAS pension is the tax advantages that it offers. Contributions made to a SSAS pension are eligible for tax relief, up to certain limits. This means that for every pound contributed to the pension fund, the member will receive tax relief at their marginal rate of tax.
In addition to this, the pension fund itself is exempt from tax on any investment returns it generates. This means that any growth in the value of the fund is tax-free, making a SSAS pension a very tax-efficient way of saving for retirement. For more information about SSAS pension read here money helper.
Who is a SSAS Pension suitable for?
A SSAS pension is particularly suitable for small businesses and company directors who want a high degree of control over their pension investments. It is also suitable for individuals who want to invest in a wide range of assets, including property and loans to the sponsoring employer.
However, a SSAS pension may not be suitable for everyone. Because the members of the scheme are responsible for making investment decisions and managing the pension fund, they need to have a good understanding of investment markets and be prepared to take on the associated risks.
In addition to this, the costs of setting up and administering a SSAS pension can be relatively high, particularly for smaller schemes. As a result, it may not be the most cost-effective option for everyone.
Conclusion
A SSAS pension is a type of pension scheme designed for small businesses and company directors. It offers a high degree of control and flexibility over pension investments, allowing members to invest in a wide range of assets, including property and loans to the sponsoring employer.