The Value of Pension and Investment Control

Gareth Bertram

Without doubt, the primary advantage of a SSAS (Small Self-Administered Scheme) pension, is control. But how does a SSAS offer you more control you ask. Well, the clue is in the name; SSAS is an abbreviation for a Small, Self-Administered Scheme and ‘Self-Administered’ is where you gain control. A SSAS pension is essentially, all about you!

If you are a company director, HMRC rules allow you the unique advantage of starting a SSAS pension and transferring your previous workplace and/or frozen pensions to the scheme.  Taking control doesn’t mean extensive time commitment, it doesn’t demand expert knowledge, but as a business owner, it is essential that you take advantage of the opportunity now, to build a tax-efficient pension fund to give you retirement security. This is easily achievable, for as a company director, you are afforded the privilege of managing your own pension, rather than having to contend with hidden and elevated fees, confused and bundled together investments and a lack of transparency when it comes to where your pension funds are invested.

So, let’s move onto ‘value’. A SSAS pension is a multifaceted tool for adding value to your pension and giving you the flexibility to achieve your strategies and goals. But let’s not dismiss its simplicity. A SSAS is not a complicated beast, but a very logical and straight forward business tool. With the right support and advice, you can very quickly take control and vastly increase your ability to invest and grow your funds.

But what value makes starting a SSAS worthwhile for you? Well, let us start by looking at what ‘not’ having a SSAS means for you.

  • Without a self-administered scheme, your pension pot is inaccessible; you cannot gain access to the funds until you are 55 years old and even then, access is restricted.
  • When your pension is managed by a third party, fees paid to pension companies are not transparent, expensive and hard to understand
  • Investments made on your behalf are beyond your control and non-transparent
  • You are unable to predict the value of your fund at retirement
  • Any investments you make, outside of a pension, are liable for tax
  • When you die, your pension is lost to the pension company and does not reach your family as a legacy

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SSAS Success 2020

At a glance, the key advantages of a SSAS are:

  • You gain control. You have access to your pension funds, even before the age of 55 and can invest the funds as you wish.
  • Anything you pay into your pension receives corporation tax relief
  • All investment into the SSAS grows tax-free. Imagine the tax a SSAS would save on 100k of investment at a 5% return, for example; it would be thousands.
  • Fees are minimised as the SSAS pays fees as one whole, not per member of the SSAS
  • You can set strategies and goals with your investments and predict their outcome, meaning you can plan for the retirement you desire
  • Funds kept within your SSAS are far more tax efficient than funds kept within your business
  • A SSAS is afforded all the same benefits other pensions offer, plus much more

The SSAS lets you decide. Your pension funds can be used both right now and for your retirement! Retire when you want to and how you want to. At age 55, you can set up a draw-down facility from the SSAS. Again, you would only pay personal tax, rather than the dividend tax you would be liable for, should you keep the money within your company.

A SSAS can invest in all the things other pensions can invest in, plus much more and all on your terms, as you decide. Often called, the Property SSAS Pension, you can invest in commercial property and even buy your own business premises, safely putting this asset inside the ring-fenced SSAS wrapper. As an asset then owned by the pension, any increase in value is exempt from capital gains tax, if sold. Rent paid to the SSAS, to lease the business premises from the SSAS, receives corporation tax relief. Investment options are many, but that is the beauty of the SSAS. The direction you take to reach your desired destination is entirely up to you!

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