What is a SSAS pension and how does it work?

Full answer

A Small Self-Administered Scheme (SSAS) is a type of occupational pension established by a limited company, most often for its directors, owners and selected employees. It is capped at 11 members, who are generally all trustees and so collectively control the scheme's investments and decisions. This makes it popular with family businesses and owner-managers who want hands-on control of their retirement funds. Who it affects: company directors and business owners; it is generally not relevant to ordinary employees, who are more likely to be in a standard workplace scheme. Key features: a SSAS can invest more flexibly than most pensions. It can buy commercial property (often the firm's own trading premises, then leased back), and it can make a loan back to the sponsoring employer of up to 50% of the scheme's net assets, on commercial terms and secured -- a feature unique to SSAS that lets the pension help fund the business. Pooling members' funds in one scheme can also cut per-member costs. Contributions get the usual tax relief, and for 2026/27 the standard pension annual allowance is GBP 60,000 (subject to tapering for very high earners and the GBP 10,000 money purchase annual allowance if flexible income has been taken). Employer contributions are generally a deductible business expense against corporation tax, which for 2026/27 runs at 19% on profits up to GBP 50,000 and 25% above GBP 250,000 with marginal relief between. At retirement (from age 55, rising to 57 in 2028) members can normally take 25% tax-free, with the rest taxed as income. A SSAS is complex, requires a professional administrator and HMRC registration, and the loanback and property rules are strict, so specialist advice is essential. To estimate contribution tax relief or the corporation-tax saving on employer contributions, use a pension or corporation tax calculator.

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