What is the difference between a SSAS and a SIPP pension?

Full answer

Both SIPPs and SSAS pensions give members significant control over investment choices compared with a standard workplace or insured personal pension, but they differ in structure, typical use case, and some of the powers available. **Who typically uses each** A SIPP is designed for an INDIVIDUAL, opened directly with a pension provider, and is widely available to almost anyone wanting more investment control over their pension savings. A SSAS is an OCCUPATIONAL pension scheme, typically set up by the directors of a small or family-owned limited company (usually with a handful of members, often the directors themselves), sponsored by that employer. **Loanback to the sponsoring employer -- a key SSAS feature** One of the most distinctive SSAS powers is the ability for the scheme to lend money BACK to the sponsoring employer, subject to strict conditions (generally up to 50% of the scheme's net assets, secured against a first charge asset, repaid with interest at a commercial rate) -- this loanback facility is not available through a standard SIPP, making SSAS attractive to business owners wanting to use pension funds to support their own company's cash flow or investment needs. **Commercial property purchase** Both SIPPs and SSAS can purchase commercial property (including, commonly, a business's own trading premises, which the business then pays rent to the pension scheme to occupy) — this is a shared feature rather than a SSAS-only power, though SSAS schemes with multiple director-members can pool funds together to afford a larger property purchase jointly. **Governance and member control** SSAS members are typically also the scheme's trustees, giving them direct collective control over investment decisions as a group, whereas a SIPP is usually administered by a professional SIPP provider/trustee on behalf of the single individual member, with the member directing investment choices within the platform's available options. **Worked example** Three co-director siblings running a family manufacturing business each transfer existing pensions into a single SSAS. The SSAS then lends £150,000 back to their company (within the permitted loanback limits, secured and at a commercial interest rate) to fund new machinery, and separately uses remaining scheme funds to purchase the company's trading premises, which the company then pays market rent to occupy -- structures not available through individual SIPPs. **Practical tip** If you are a sole individual wanting more investment control over your own pension, a SIPP is usually simpler and cheaper to run; SSAS is generally only worth the extra complexity and setup cost for small business owners specifically wanting to use pension funds for loanback or joint commercial property arrangements with fellow directors.

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