A Small self-administered pension scheme (SSAS) is a type of employer sponsored defined contribution workplace scheme. SSAS are usually set up to provide retirement benefits for a small number of a company’s directors or senior/key staff. The number of members is usually no more than 11. A SSAS is managed by its trustees who may be members of the scheme. Similar to regular pensions contributions can be made by members and/or employees, each receive tax relief on the contributions made.
One on the main benefits of a SSAS is that it offers a lot of flexibility on where assets can be invested in for example it can be used to purchase the company premises and lease these back to the company or lend money to the company to purchase company shares.
All of the SSAS assets are held in the name of the trustees and there is no personal pot for each member, but the member holds a proportion of the schemes assets. You can start taking benefits from a SSAS from age 55.
The value of benefits will depend on:
- how much has been paid into the scheme on your behalf;
- the length of time that each contribution has been invested;
- investment growth over this period; and
- the level of charges
Generally, you can decide whether to take an income only from the scheme or a tax free cash lump sum and a reduced income. This will be a maximum of 25% then the balance is used to purchase an annuity or income drawdown. The amount you will receive will depend on any income to be paid to a dependent if you die, income increasing each year in line with inflation and the frequency of income paid.
For more information on a Small self-administered pension scheme, please contact us.