Benefits of SSAS

Flexibility in Retirement Planning

SSAS pensions offer flexibility in retirement planning. This can include the option to invest in assets that aren’t generally available to other pension schemes. 

With SSAS you have available to you a variety of investment options that offer higher returns than more mainstream pension investment offerings. And the great thing about SSAS is that any investment income or capital gains are able to grow free from tax, turbocharging your pension.

Control Over Investments

SSAS members have high degrees of control over the scheme’s investments. This allows for bespoke investment strategies with the ability to yield better returns than traditional pension schemes. 

Investments within SSAS grow tax-free, from commercial property investments to loan notes and bonds paying up to 18%. Some can even be compounded yearly. This gives SSAS members the opportunity to tailor their investments to suit their financial needs and reach their financial goals.

Visit One Crown Investments for more information.

Property Investment

Many SSAS members enjoy the tax efficiency of property investment by investing in commercial property. You are able to purchase commercial property using a SSAS to then let out to a tenant. 

Alternatively, you are able to use funds from the SSAS to purchase commercial property off your existing Company, (a business premises perhaps) which, in turn, injects cash into your Company. This has the potential of leasing the property back to the Company, with your Company therefore paying monthly rent to the SSAS, growing your pension each month, in an environment free from tax.

Loan Back to the Company

Under certain circumstances and with proper adherence to regulations, SSAS pensions are able to make loans to the sponsoring company. This allows you to access funds without having to borrow from the bank. It provides your business with a source of income when it’s needed most, helping to fund your continued growth. 

Tax Efficiency

One of the biggest advantages of SSAS is its tax efficiency. SSAS provides the following tax efficiency benefits:

Corporation Tax Efficiency

SSAS pensions offer Corporation Tax efficiency. This means that contributions made by your company into the SSAS are tax-deductible, reducing the Corporation Tax on contributions by up to 25%.

Inheritance Tax Efficiency

One of the great advantages of a SSAS pension is that assets within the SSAS are not liable for Inheritance Tax (until 2027). This means members of a SSAS are able to seamlessly pass assets on.

Capital Gains Tax Efficiency

Commercial property within SSAS is not generally subject to Capital Gains Tax. This is where you are taxed on the profit you make when you sell an asset.

Maximise Allowances

Adding a spouse or partner as a SSAS member provides additional tax efficiencies, allowing for both sets of allowances to be maximised and benefitted from. This is why SSAS pensions are so popular for SMEs and family-run businesses. 

Learn how to maximise SSAS allowances.

Death Benefits and Wealth Preservation

SSAS pensions can be used as a vehicle for wealth preservation and succession planning. Assets held within the scheme can be passed down to beneficiaries upon the member’s death with significant tax savings. 

Retirement Planning

SSAS pensions offer flexibility in retirement planning. Members can choose when and how to access their pension benefits, allowing for a customised retirement strategy.

Creditor Protection

A SSAS Pension has the additional benefit of having its assets ring fenced from creditor action.

Pension Drawdown

Everyone manages their retirement funds differently. While many people choose to buy annuities at retirement, others prefer the flexibility of keeping their funds invested. This allows withdrawals to be made as and when they are needed most.

When SSAS members are ready to draw their pension, they have multiple drawdown options to choose from:

Flexi-access Drawdown: this allows members to take money out of their pension pot to live on during retirement. It allows individuals to decide how and when they receive their pension payments and up to 25% of the total pension pot being able to be taken out as a tax-free lump sum at the age of 55.

Uncrystallised Funds Pension Lump Sum: this allows individuals to take their pension out in a series of lump sums, helping to spread the tax-free cash across multiple withdrawals. It ensures the remaining balance will be taxed as pension income at the point of withdrawal.

‍Capped Drawdown Pension: this is a form of pension income withdrawal. While the amount taken out each year can vary, SSAS pension members cannot exceed the withdrawal limit amount set by the Government Actuary’s Department.

Business Exit Strategies

For business owners looking to exit their businesses, a SSAS can be used as part of their exit strategy, with a SSAS being a valuable source of capital. It means that the purchaser of your business will likely take over the Company’s operating lease and the lease rent will continue being paid into the SSAS after the business sale, providing income, potentially for years to come.

Visit the SSAS Video Hub to learn more.