SSAS Pension Scheme

What is a SSAS pension? Learn how to set up a SSAS, how it works, and its pros and cons for business owners and directors.

A SSAS pension can be a powerful retirement and business planning tool—especially for company directors and family-run firms. It offers greater control, wider investment choices, and unique tax advantages. But it’s not for everyone, and it comes with responsibilities.

This guide breaks down what a SSAS is, how it works, how to set one up, and what to consider before you do.

What Is a SSAS Pension?

SSAS stands for Small Self-Administered Scheme. It’s an occupational pension scheme designed for directors, senior employees, or family members of a limited company. While similar in some ways to a SIPP (Self-Invested Personal Pension), a SSAS gives multiple members collective control over the pension pot, and it can also lend money to the sponsoring company, which makes it particularly attractive for entrepreneurs.

A SSAS is established by a company and is usually limited to no more than 11 members. Each member is also typically a trustee, which gives them direct control over how the scheme is managed and invested.

How Does a SSAS Pension Work?

A SSAS operates as a registered pension scheme with HMRC and enjoys the usual pension tax benefits:

  • Tax relief on contributions

  • Tax-free investment growth

  • 25% tax-free lump sum at retirement

  • No inheritance tax if managed properly

The scheme is established by a limited company, and both the business and individual members can make contributions. The pooled fund can be invested in a wide range of assets, including:

  • Commercial property

  • Stocks and shares

  • Loans to the business (up to 50% of scheme value)

  • Private company shares (with strict rules)

Unlike other pensions, SSAS schemes can even buy the company’s own trading premises and lease it back—freeing up cash while keeping the property within the pension.

Who Pays Into a SSAS Pension?

Both the employer (the limited company) and individual members can make contributions. These are treated like standard pension contributions for tax purposes:

  • Employers can deduct contributions from Corporation Tax.

  • Members can receive tax relief up to their annual allowance (£60,000 in most cases for 2025/26).

Some directors use company contributions to move profit into their pension pot in a tax-efficient way, reducing Corporation Tax while saving for retirement.

What Happens When Members Reach Retirement?

At retirement (usually from age 55, rising to 57 from April 2028), each member of a SSAS can:

  • Take 25% of their share as a tax-free lump sum.

  • Use the rest for drawdown or purchase an annuity.

  • Leave the remaining funds invested in the scheme for future income or inheritance.

SSAS pensions also allow flexible retirement—members don’t need to draw their benefits all at once or retire at the same time.

If a member dies, their SSAS pension can usually be passed on free of inheritance tax if under age 75 and properly structured.

What Are the Advantages of a SSAS Pension?

There are several standout benefits for business owners and directors:

  • Full investment control: You choose where to invest, including commercial property and private loans.

  • Tax-deductible contributions: Contributions reduce company profits for Corporation Tax purposes.

  • Business funding option: You can lend up to 50% of the SSAS fund to your business, under strict rules.

  • Estate planning benefits: Can be structured to pass pension wealth to beneficiaries tax efficiently.

  • Collective scheme: Pooling assets across members can open larger investment opportunities.

What Are the Disadvantages of a SSAS Pension?

Despite its perks, a SSAS isn’t for everyone:

  • Complex to manage: Requires trusteeship, formal reporting, and HMRC registration.

  • Regulatory oversight: Must comply with pension law, and trustees have legal responsibilities.

  • Set-up and admin costs: More expensive to run than a SIPP or workplace pension.

  • Limited to company-connected members: Not open to the general public, only company stakeholders.

How to Set Up a SSAS Pension

Setting up a SSAS requires several steps and usually professional support. Here's how it works:

  1. Speak to a specialist SSAS provider or adviser: You’ll need help with structuring, trust setup, and HMRC registration.

  2. Establish the trust: A SSAS is a standalone trust, legally separate from your business.

  3. Appoint trustees: Members usually act as their own trustees. Alternatively, a professional trustee can be appointed.

  4. Register with HMRC: The scheme must be registered to receive tax relief and operate legally.

  5. Create the scheme rules and bank account: You’ll need clear rules and a dedicated bank account for the scheme.

  6. Transfer existing pensions or contribute: Members or the company can move funds into the SSAS.

  7. Start investing: Once funds are available, investments can be made in line with HMRC rules.

Because of the complexity, ongoing scheme administration is usually outsourced to a professional trustee or SSAS administrator.

Final Thoughts

A SSAS pension offers business owners a powerful mix of control, flexibility, and tax advantages. It can act as both a retirement vehicle and a business funding tool, but it demands commitment and careful management. If you’re a director in a limited company and want to keep more control over how your pension is invested—or want your pension to support your business growth—a SSAS could be a smart move.