Best place to set up a SSAS pension?
Discussion
I own a small company that has very low overheads and is gradually building up a reasonable balance in its current account. There's a limit to what I can tax efficiently take out (and indeed need) personally via salary and dividends, leaving an ever growing business account balance which is earning precisely nothing.
The advice I'm getting is that the best thing I can do with it is set up a SSAS pension, which I can then put money into tax free (albeit I will have to pay tax in the future to withdraw it). BestInvest was suggested as a good way to invest the resulting pension fund, however they tell me that I need to have an actual pension vehicle in place before they can then invest that money.
I'm struggling a bit to get good advice on where to go to set that up in a financially efficient manner. Someone has suggested PensionBee would be a good option.
Does anyone have any thoughts or advice on this?
The advice I'm getting is that the best thing I can do with it is set up a SSAS pension, which I can then put money into tax free (albeit I will have to pay tax in the future to withdraw it). BestInvest was suggested as a good way to invest the resulting pension fund, however they tell me that I need to have an actual pension vehicle in place before they can then invest that money.
I'm struggling a bit to get good advice on where to go to set that up in a financially efficient manner. Someone has suggested PensionBee would be a good option.
Does anyone have any thoughts or advice on this?
I just use a SIPP.
Have a look at Vanguard products which are cheap and easy to use.
Worth noting that pension contributions from a company are limited to £40k a year although you can carry forward three years if a fund has been in place for the relevant time.
I think you can only offset against profit in the current year so there wouldn’t be much point pensioning £100k if you only made £30k profit.
Have a look at Vanguard products which are cheap and easy to use.
Worth noting that pension contributions from a company are limited to £40k a year although you can carry forward three years if a fund has been in place for the relevant time.
I think you can only offset against profit in the current year so there wouldn’t be much point pensioning £100k if you only made £30k profit.
V8RAW said:
It was announced in the last budget that the maximum pension payment limit is now £60,000 per year. ??
Make sure you go with a SSAS specialist that really pushes you to drive the pension fund and use it properly. Some SSAS providers just sit back and don't take an active roll in it.
Thank you. Any suggestions for someone who could set this up? Really struggling to find anyone. Nearly went with St James Place, but their fees are very high. Have asked my accountant, he doesn't do it but suggested PensionBee.Make sure you go with a SSAS specialist that really pushes you to drive the pension fund and use it properly. Some SSAS providers just sit back and don't take an active roll in it.
I'm really floundering in the dark with this...
Ari said:
I'm clearly no expert, but I'm pretty sure that won't work for this.
If a SIPP won't work you haven't given us enough detail because on the face of it I am in exactly the same position as you and run a SIPP for simplicity.If you are looking to have more than just yourself in the pension a SSAS may be more appropriate, also if you may want to purchase commercial property within it. There are a few other flexibilities but both have to follow the same HMRC rules.
I think you'll need to be a lot more hands on with a SSAS.
Ari said:
trickywoo said:
I just use a SIPP.
Have a look at Vanguard products which are cheap and easy to use.
I'm clearly no expert, but I'm pretty sure that won't work for this.Have a look at Vanguard products which are cheap and easy to use.
On the other hand if he wants to buy the company a property or lend the company money or add other beneficiaries then a SSAS would be the way to go.
SSASs are considerably more expensive and bureaucratic than SIPPs like the Vanguard or II versions.
This is really interesting, thank you all! I was told that as it was a company pension, it has to be a SASS. But it really is just to plonk money into - basically there's a decent amount rattling around in the business current account doing nothing, and no plans to spend it on anything significant for the company, so I just want to do something useful with it.
Ari said:
This is really interesting, thank you all! I was told that as it was a company pension, it has to be a SASS. But it really is just to plonk money into - basically there's a decent amount rattling around in the business current account doing nothing, and no plans to spend it on anything significant for the company, so I just want to do something useful with it.
SIPP is fine for that. In fact all the major platforms will have the facility to take company contributions with just a few clicks.Ari said:
This is really interesting, thank you all! I was told that as it was a company pension, it has to be a SASS. But it really is just to plonk money into - basically there's a decent amount rattling around in the business current account doing nothing, and no plans to spend it on anything significant for the company, so I just want to do something useful with it.
AFAIK the only advantage of going down the SSAS road is it gives you everything a SIPP does but allows you to have more planning and investment options. if you want to keep things as simple as possible a SIPP will be fine. I'm obviously being particularly dense here, but a SIPP is a Self Invested Personal Pension. So surely you invest your own personal money into those? In which case won't taking money from the company into my own account and investing it leave me open to income tax (as opposed to leaving it within the company by using a company pension).
Not disagreeing, as you've probably noticed I don't know much about this, but I thought the trick was for it to remain 'company money'?
Not disagreeing, as you've probably noticed I don't know much about this, but I thought the trick was for it to remain 'company money'?
Ari said:
I'm obviously being particularly dense here, but a SIPP is a Self Invested Personal Pension. So surely you invest your own personal money into those? In which case won't taking money from the company into my own account and investing it leave me open to income tax (as opposed to leaving it within the company by using a company pension).
Not disagreeing, as you've probably noticed I don't know much about this, but I thought the trick was for it to remain 'company money'?
No the company makes pension contributions on your behalf. Its company money and gets treated as a cost for tax purposes. The company therefore saves the corporation tax on any contributions it makes.Not disagreeing, as you've probably noticed I don't know much about this, but I thought the trick was for it to remain 'company money'?
The company money effectively transfers to you via the pension. This is partly why there are so many rules around pensions - i.e. age you can access it, limitations on contributions (annual and in total) etc.
As long as you are with a registered SIPP provider the company pays direct from the company bank account to the SIPP provider.
The Company should be able to place cash in an interest bearing account. "Flagstone" is one of a number of providers in this space if you need someone to manage it for you (for a fee c.25bps)
If you do decide that you could use a SSAS, there is some material worth reading on the "InvestAcc" website..
If you do decide that you could use a SSAS, there is some material worth reading on the "InvestAcc" website..
I’ve run a SSAS in the past for all my family members. There are some technical differences with SIPPs around notional allocation and we were able to use the SSAS for a loan to expand our operations. SIPPs cannot do this but they can gear up and borrow money for certain projects.
We closed the SSAS when my parents retired and I now run 3 SIPPS which I’m finding a lot more flexible and we invest heavily in commercial properties that we rent back to our businesses.
Look at Vanguard or drop Nik at Intelligent Money a line on the Finance forum.
We closed the SSAS when my parents retired and I now run 3 SIPPS which I’m finding a lot more flexible and we invest heavily in commercial properties that we rent back to our businesses.
Look at Vanguard or drop Nik at Intelligent Money a line on the Finance forum.
I'm sorry for asking what I'm sure are stupid questions, but to be clear, the SIPP would be in my name, not the company name?
At what point do I pay tax? I'm obviously making a huge tax saving taking the money out of the company as an expense instead of a dividend or salary, I can't imagine that they'd let that go untaxed in future.
At what point do I pay tax? I'm obviously making a huge tax saving taking the money out of the company as an expense instead of a dividend or salary, I can't imagine that they'd let that go untaxed in future.
Ari said:
I'm sorry for asking what I'm sure are stupid questions, but to be clear, the SIPP would be in my name, not the company name?
At what point do I pay tax? I'm obviously making a huge tax saving taking the money out of the company as an expense instead of a dividend or salary, I can't imagine that they'd let that go untaxed in future.
At what point do I pay tax? I'm obviously making a huge tax saving taking the money out of the company as an expense instead of a dividend or salary, I can't imagine that they'd let that go untaxed in future.
Hi Ari yes it’s in your name. It’s a self invested personal pension.
Once you decide to draw your pension you will be taxed at your marginal rate at that time but you will be allowed 25% of your pot tax free.
I’m not going to get into the capping of the tax free lump sum as it may not be applicable to you.
I’ve set up a SSAS. Used SSAS Practitioner.com to establish it and administer it for a couple of years and then took it over myself as scheme administrator. I don’t have a professional trustee (it is not a strict legal or regulatory requirement) and this can sometimes make opening bank accounts tricky. We’ve never really used the additional flexibility the structure gives over a SIPP, but it is there if we need it. The regulatory/reporting requirements to HMRC and the Pensions Regulator are very straightforward.
Gassing Station | Business | Top of Page | What's New | My Stuff