What can an SSAS pension invest in?

A Comprehensive guide to pensions and investments for investing in property

A SSAS pension is the most flexible and effective business and property pension, created exclusively for company directors in the UK. With a SSAS pension, you have access to every type of investment that is permitted according to the rules set out by HMRC. The flexibility afforded to you by a SSAS pension is reflected in the vast range of investment options it offers. But what exactly can you invest in using a SSAS pension?

As an occupational and property pension expert specialising in SSAS pension solutions, The Landlord’s Pension works with a number of SSAS pension providers, each with specific criteria regarding the types of investments you can make. With such a variety of investments at your disposal and investment returns to benefit from, a guide to your options when it comes to investing with a SSAS pension is an ideal place to start.

Property Investment

Property has long been seen as one of the safest investment options available due to its relatively solid appreciation value — as such, property investment remains a popular choice for many a retiree.

In the Office for National Statistics’ (ONS) latest Wealth & Assets Survey of all regions (with the exception of Scotland), the most profitable method of retirement saving for non-retired adults was property — and by quite some margin. Therefore, it likely won’t come as a surprise to hear that it’s also a key investment option for those considering a SSAS pension scheme. A properly managed SSAS pension is also tax-free, meaning that you won’t have to pay Capital Gains Tax.

But how can a prospective investor take advantage of these impressive returns?

Property Bonds

Property bonds are a popular route to property investment with your SSAS pension scheme. Property bonds present a hands-off investment opportunity for the members of a SSAS and allow each member to enter into a loan agreement on a development project with a property developer. 

These loans provide the developer with the necessary funds to complete a project before selling or returning the completed project for a return. It is in these returns that members of a SSAS plan will see their investment yield results. Typically, bonds range between one and five years, with returns of between 6% and 12% per annum.

Land and Commercial Property

The second option available for members of a SSAS pension is investing directly in the purchase of land and commercial property. While it can be tempting to look at residential property purchases as part of a SSAS plan, the rules governing which types of property investments can be entered into by members of a SSAS are strictly governed by HMRC — unfortunately, residential properties do not make the cut. These strict regulations mean that even though a residential property may be functioning in a commercial capacity, such as with HMOs, holiday lets and home offices, they cannot be classed as commercial property within a pension fund.

Business Loans

As many property investors hold incorporated businesses, another route for investment is securing a loan from a pension fund into a member’s limited business. This means of investment provides the investor’s incorporated business with the funds to make residential property-related investments, which can be property deposits or refurbishment costs. However, it’s worth noting that these SSAS pension loans are also regulated by HMRC rules that must be adhered to.

Other Investment Options

Although the investment opportunities of property within a SSAS are attractive, there is also a wealth of other investment opportunities for members of a SSAS pension scheme account:

  • Equities: The typical stocks and shares found in most standard pension funds
  • Government gilts: These are fixed-interest securities, usually offering a low fixed return
  • Corporate bonds: These are fixed-interest securities offered by companies, which typically provide a slightly higher return than gilts
  • Foreign equities: Foreign equities are stocks and shares traded on a recognised overseas stock exchange
  • Authorised unit trusts: These are pooled funds that do not hold residential property
  • Deposit accounts: A SSAS pension can be deposited into an account with an authorised financial institution
  • Hedge funds: These are pooled investments generally made by financial institutions, such as insurance companies and banks
  • Unit trusts: These are equity investment funds generally managed by insurance companies
  • Gold: Members can invest in Investment Grade gold bullion (subject to conditions)
  • NS&I: National Savings and Investments include premium bonds and are considered to be a low-risk and low-return investment
  • Commercial loans: This includes both secured and unsecured loans to UK limited companies.

In closing, a SSAS pension is often a preferred choice for those looking for increased flexibility and control over their pension funds, as members have the ability to decide exactly where they focus their investment. For this reason — along with the highly attractive nature of property investment with a SSAS — many people tend to move their pension funds from Self Invested Personal Pension (SIPP) schemes and company and personal pensions to a SSAS.

With ONS studies showing that 79% of retired households with private pension income have a disposable income 1.6 times higher than those without private means of investing in a pension, private pension plans are becoming increasingly appealing.

If you are looking to achieve greater control over and growth from your existing or frozen pension accounts, a SSAS offers a viable solution. Its flexibility allows you to make multiple investments, whether you’re looking to invest in stocks and shares, property, or gold.

What our customers say...

  • Simon and Teresa have helped me to gain control of my pension and now I am able to invest it in property through a fund with high fixed returns. I will also be able to use it on my own purchases / projects, which gives me much more cash access... Read more

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    Martin Littleboy
  • positive review We had a number of workplace and final salary pensions, dotted all over the place and decided to pull them all into one SSAS. Laura and the team were excellent in explaining what to expect and keeping us advised every step of the way, in fact as part of... Read more

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    Rosemary Wooding
  • positive review Mike Holt and his team have been awesome getting my SSAS set up. All ready to go in record time and looking forward to building the pension pot, tax-free!

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    Jeroen Hoppe
  • positive review Really professional company.
    I’ve pointed a few clients their way that want to release ‘dead’ money from their pensions to invest in higher returns.
    Gareth really knows his stuff and Teresa is super efficient.

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    Nick Carlile
  • positive review Genuine professional people delivering top notch quality customer service accompanied with the all important experience and in-depth knowledge of this business field.
    Many thanks in particular to Gareth and Teresa for their unswerving support advice and guidance over these past few years since I took up the challenge of looking after...
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    Nick Clement