SSAS Pensions: How Do You Draw Funds from a SSAS?

SSAS pension withdrawal is a topic we get asked about a lot. We want to help you withdraw your pension in the most tax-efficient way possible. That’s why, if you’re considering drawing funds from your SSAS, we suggest that you speak with a member of our team first.

Let’s take a look at a tax-efficient SSAS Pension withdrawal.

When Can I Withdraw My SSAS Pension?

You can withdraw funds from your SSAS when you reach 55 years of age, or 57 years of age from 2028. There are many different ways you can withdraw SSAS funds; you can take it as a tax-free lump sum, guaranteed income, flexible income, or you can leave your pension invested and withdraw your funds at a later date.

SSAS Pension Withdrawal: An Example

Here’s what a tax efficient SSAS pension withdrawal could look like:

We have a husband and wife team with a Limited Company. The Limited Company set up the SSAS and, through company contributions and previous pension transfers, they have built up a joint value of £2,000,000 inside the SSAS. They are now ready to take benefits and they want to do this by taking tax free cash. 

Withdrawing a Tax Free Cash Lump Sum from the SSAS

Currently, you are allowed to take up to 25% of the pension fund as tax free cash. So, returning to our example, let’s say the wife decides to retire first. She has access to up to 25% of the fund value as tax free cash, totalling £250,000. She would like to withdraw £50,000 a year. So, we arrange to pay the wife £50,000 of tax free cash. 

Once the tax free cash has been exhausted, any income drawn from the SSAS pension is subject to Income Tax at your highest marginal rate. To avoid this, you could potentially switch and withdraw up to 25% tax free cash from the husband’s share.

If you are considering withdrawing a tax free lump sum from your SSAS, book a call with a member of the One Crown Pensions team. We can talk you through the process of withdrawing funds from a SSAS.

Making Future Contributions to the SSAS

Once income has been withdrawn from the SSAS, future contributions to the pension scheme are restricted to a maximum of £10,000 per annum. So, returning to our husband and wife example, if the Company is still paying contributions for both the husband and wife, these contributions are restricted to £10,000 per annum for the wife the minute she takes any income. The same applies to the husband as soon as he takes any income from the SSAS.

Learn more about SSAS contributions.

SSAS Pension Investments

Don’t forget that while you’re taking SSAS pension withdrawals, the remaining funds stay invested. So, you need to be mindful of liquidity in the pension scheme, particularly if you hold commercial property inside SSAS because you want to be able to meet those annual withdrawal accounts.

If you would like to speak to somebody about SSAS investment options, get in touch with our sister Company, One Crown Investments, who only offer SSAS compliant investments.

Speak to Us About SSAS Pension Withdrawal

If you are thinking about withdrawing funds from your SSAS, speak to us about how to manage your pension withdrawals effectively. We can discuss your options and financial goals.

For more SSAS pension information, visit our SSAS Video Hub and explore our wealth of SSAS-related videos and articles for more information.