SSAS Pension or SIPP?

Although SSAS and SIPP pensions share several similarities, they differ when it comes to their structure and who they will benefit the most.

What is a SSAS Pension?

A SSAS is an occupational pension scheme, usually set up by company directors. In most cases, directors want more control over investment decisions relating to their pensions — even more so if they plan to use the pension to invest in their business. In setting up a SSAS, each member becomes a trustee, which is a requirement under the Pensions Act 1995. The key features of a SSAS are as follows:

    • It is an occupational pension scheme

    • Members are usually directors or employees of the sponsoring employer

    • Every member has a notional share of the funds, including non-insured assets, such as property and Open Ended Investment Companies (OEIC), and insured assets, like Trustee Investment Plans

    • There is a limit of 12 members.

What Is a SIPP?

A SIPP is a personal pension plan, which is usually set up by an insurance company or a SIPP specialist. In this case, a member has greater control over the investments, but, unlike with a SSAS, doesn’t have to be a trustee. Anyone can take out a SIPP, as long as they meet the eligibility criteria, which, due to the higher costs involved in running a SIPP, is usually based on a minimum fund size. Additional features of a SIPP include:

  • A SIPP is a personal pension plan

  • There is the option to invest in non-insured assets, such as property and OEICs, as well as insured assets, like a trustee investment plan

  • The employer of a SIPP member can contribute to their pension plan and may operate payroll deduction on their behalf.

SSAS Pension or SIPP?

So which pension scheme is the best? Well, that depends entirely on who the members are and how much involvement they want in running the scheme. Personal preference comes into play as much as anything else, as well as the objectives you have in mind.

A SSAS is appropriate for you if…

  • Your individual or combined pension fund exceeds £75,000

  • You want to pool your pension fund alongside your spouse, family members or business partner

  • You’d like the option to lend money from your pension back to your company

  • You want to manage your pension fund with a more entrepreneurial approach in mind

  • You would like to purchase commercial property

  • You are looking for professional pension advice

  • You want more flexibility and control when dealing with pension investments

  • You would like to have flexibility in terms of drawing benefits when you’re retired

  • Alternative sources of income are available at retirement.

A SIPP is appropriate for you if…

  • Your pension fund is more than £75,000

  • You are seeking bespoke financial advice

  • You are willing to pay a higher level of charges (a SIPP tends to be more expensive than a “standard” pension)

  • You want more control over your pension investments in the stock market

  • You want flexibility in drawing benefits when you’re retired

  • Alternative sources of income are available at retirement.

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    Amos Ishaku
    02/05/20
  • Highly recommend The Landlord's Pension for opening a SSAS. They are highly professional yet friendly and personable. They are really helpful and keep you informed every step of the way. It's refreshing to pay for a service by a company who actually do what they say they are going... Read more

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    Vicki Prosser
    29/01/20
  • Highly recommend The Landlord's Pension for opening a SSAS. They are highly professional yet friendly and personable. They are really helpful and keep you informed every step of the way. It's refreshing to pay for a service by a company who actually do what they say they are going... Read more

    Vicki Mason Avatar
    Vicki Mason
    29/01/20
  • Very happy with the service from explaining how things work to setting things up with HMRC and pension transfers, everything has gone as planned and in some cases quicker than expected.
    Thank you Dan, Michelle and Teresa for your patience and professionalism in dealing promptly with all our queries.

    Mei Wong Avatar
    Mei Wong
    20/12/19
  • I recently opened my SSAS through The Landlord’s Pension and they have been professional, approachable and efficient throughout. Simon, Teresa and Michelle have all been great in answering my questions and queries and doing their best to ensure the process of transferring over my existing pension has been a... Read more

    Steve Brazil Avatar
    Steve Brazil
    08/12/19

The Landlord’s Pension is an expert in this niche sector of financial planning and have been helping clients to invest in property since 2004