What’s a SSAS Pension Scheme?

Explaining the SSAS Pension Scheme

Wake up, get to work, have drinks with friends in the evening, pass through that dreamy chicken house, watch one episode of Suits & get in bed. That’s every working-class 20 something year old’s typical day. Sometimes you’re too tired to even think about your future & what you envision it’ll be. Yes, you might steal five-minutes during that boring presentation & imagine yourself drinking a glass of champagne, but retirement is never a concern. According to Marguerita Cheng, the CEO of Blue Ocean Global Wealth1, when you’re in your 20s, retirement always seems very far off that it feels more like a myth. It’s one of the most popular excuses that people use to justify not saving for the sunset years. Almost 60% of those in their 20s spend cash on rent, food, basic needs, & partying all weekend, leaving nothing for their future. Those who are close to the retirement age will tell you that they years slip by so fast & if you haven’t built a sizeable nest egg, you start falling into depression & having anxiety attacks about your sunset years. It becomes more challenging trying to save when you’re in your 40s since you acquire expenses like mortgages, school fees, loans on that Range Rover & black tax if your family depends on you. Yes, you might be earning a lot of cash when you start your career, but you have one thing that most rich & older folks don’t – time. Therefore, start early, & you’ll enjoy your sunset years travelling, renovating your home or even establishing rental apartments. If you don’t have a clue about pension schemes & what they’re all about, here’s a comprehensive insight into one of the best pension schemes – the SSAS2 pension plan.
What’s A SSAS Pension Scheme

SSAS Pensions Explained

The Small Self-Administered Scheme or SSAS pension plan is a form of workplace pension that is independently managed by the firm that sets it up. The pension plan doesn’t need any interactions with insurance firms or financial institutions.

It’s usually set up by the directors and other senior executives of a firm to offer more substantial retirement benefits and significant investment flexibility, As a member of an SSAS pension plan, a company has the freedom to decide how their pension funds will be invested, and they can also use their SSAS finances to invest in the company – they’ll be their own investors. Isn’t that the dream?

Small Self-Administered Scheme Pensions And How They Work

Small Self-Administered Scheme Pensions And How They Work

Let’s take a closer look:

A small self-administer scheme pension protects you from the fluctuating state of financial markets but has some drawbacks to it as well. It also offers more flexibility than a private sector one does in terms of transferring benefits even if your employer moves into or out of the public sector.

This type of retirement plan is sometimes called an occupational pension because it needs to be offered through an organization such as a trade union, professional body, friendly society, club, or other association

SSAS Pension Rules

SSAS pensions are mostly popular with small or family-managed businesses, and they’re a form of defined contributions pension scheme that’s available to the staff of a firm and their family members. That might include those who aren’t part of the firm directly but are related to a staff member.

Here’s an interesting fact:

As per the SSAS pension rules, only one SSAS pension scheme is permitted in every firm, and the firm membership is capped at 11 persons. A Scheme Administrator manages the Small Self-Administered Scheme accounts and its trustees who are 90% shareholders of the pension scheme.


The HMRC1 (Her Majesty’s Revenue & Customs) SSAS rules and regulations enable a member to invest in a myriad of asset funds, including commercial estates. The pension plan can also provide commercial mortgages or loans. It can therefore offer a loan to the firm to buy an asset like a new building through a mortgage, for instance, provided that it’s for investment purposes exclusively, 

The Tax Benefit of SSAS Pensions

The Tax Benefit of SSAS Pensions

Any contributions that firm members make to an SSAS pension scheme are entitled to tax relief. The basic rate taxpayers receive is a 25% tax add-on, meaning that the HMRC includes £25 for every £100 you contribute to your pension plan.

You see:

If you contribute a higher rate, you’ll have the right to claim an additional tax relief amount via your tax returns. The contributions that are paid into the pension plan by your boss also qualify for some tax relief, and that can assist in reducing its total tax liability.

Cashing in A SSAS Pension

If you’re a member of the SSAS pension plan, you can start receiving benefits when you reach 55 years. Like all private, personal, and workplace pension schemes, you have the opportunity to choose to take the first 25% from your pension savings as a tax-free lump sum or get 25% for every withdrawal, untaxed.

The number of benefits you’re eligible for will be dependent on the amount you and your boss have paid into your pension scheme. It’s also based on the amount of time each contribution has been invested and how these investments perform.

After receiving your tax-free amount, every other withdrawal will be subject to the standard income tax rate. You can opt to take your pension scheme as an income either through buying an annuity or through income drawdowns.

Got Questions? Check These First

What’s A SSAS Pension?

What’s the Difference Between A SSAS and A SIPP?

What Can A SSAS Pension Invest in?

What Happens to Your SSAS When You Die?

In conclusion

In short:

The SSAS Pension Scheme is a government scheme that will help people who are not eligible for the CPF pension to save towards their retirement. This article has given you an overview of how it works and what benefits those enrolled in this scheme can expect when they retire.


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