As a business owner, navigating the world of workplace pension schemes might feel complex and overwhelming.
From automatic enrolment to self-invested personal pensions (SIPPS), there’s no shortage of choice when it comes to setting up a scheme for your employees.
Yet, small self-administered pension schemes (SSAS) offer several unique benefits that could make them an attractive option for your business.
Keep reading to learn about how SSAS pensions work and discover four key reasons you might want to consider setting one up for your employees.
How SSAS pension schemes work
A SSAS is a type of defined contribution (DC) occupational pension scheme that is available to limited companies and partnerships.
You need to be a company director to set up a SSAS. After doing so, you can invite other people to join – typically family members or senior staff – provided that the total number of members does not exceed 11.
Scheme members are usually appointed as trustees. As such, they take an active role in deciding how pension funds are managed and invested.
As with other DC schemes, the company makes regular contributions to a SSAS. However, while employees can pay into the scheme, there is no obligation to do so.
Each member will be entitled to either an individual pot or a percentage of the whole pot.
Either way, they can access their funds from the age of 55 (rising to 57 in 2028). If an employee leaves the company before they retire, they can usually choose to leave their money in the SSAS or transfer it to another pension scheme.
4 compelling reasons to consider switching to a SSAS
A SSAS provides several business benefits, especially to small and family-run companies, including:
1.Tax efficiency
Any gains made through allowable investments are free from Income Tax, and there is no Capital Gains Tax (CGT) to pay on the disposal of investments.
Moreover, all contributions are deductible against profits. So, implementing a SSAS could help to reduce your company’s corporate tax liabilities.
As with other DC pensions, members can benefit from tax relief on eligible contributions and may withdraw up to 25% as a tax-free lump sum – provided this does not exceed £268,275 (2025/26) –from the age of 55 (rising to 57 in 2028).
2. Investment flexibility and control
Typically, the business owner would be the administrator of a SSAS and its members act as trustees. There is no pension provider.
This means that collectively, you’re likely to have more control and flexibility when it comes to key investment decisions, compared to traditional pension schemes.
As a result, you could tailor investments to align with your business values and appetite for risk. For example, you might opt for opportunities with greater profit potential.
There’s also usually a greater choice of investment options with a SSAS. Indeed, one significant advantage of this type of scheme over other types of pension is the ability to invest in commercial property, including your own business premises.
As such, you could buy the property through your SSAS and lease it back to your business. This might allow you to benefit from a tax-efficient rental income while the property’s value has the potential to continue growing free from CGT.
3. Cost savings
The cost of running a SSAS is likely to vary depending on how complex it is, the number of members, and so on.
However, as a self-administered scheme, you and the other members will be in control of administering the fund and making key investment decisions.
As such, a SASS could allow you to avoid the management fees often associated with larger schemes.
4. Funding business growth
If you’re keen to take your business to the next level, a SASS could provide a valuable source of funding.
This is because the scheme can lend funds back to the business, provided that the loan is secured and does not exceed 50% of the SSAS’s fund value.
For example, if your SSAS is worth £600,000, the scheme could normally loan your business up to £300,000.
Speak with a financial planner to decide if a SSAS is right for your business
Of course, as with all aspects of financial planning, there is no one-size-fits-all approach to workplace pensions.
While the business benefits above might look attractive, a SSAS may not be the most suitable option for every business.
If you have a large workforce, the limited membership size could be problematic. Additionally, with no pension provider, the legal and administrative responsibilities of overseeing the scheme could become onerous for members.
So, it’s crucial that you consult a financial professional to talk through your options before committing to a pension scheme.
Get in touch
If you’d like to learn more about SSAS or any other type of workplace scheme, we can help.
To find out more, please get in touch. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Approved by Best Practice IFA Group Ltd on 25/04/2025