SSAS Pension Benefits

Flexible Retirement Income

The Pension Commencement Lump Sum

SSAS Pension Benefits: facts and figures

  • Pension Pot £100,000
  • Comencement Lump Sum 25%
  • Tax Tax-free

Flexi-Access Drawdown (FAD):

  • You can choose to take up to 25% (a quarter) of your pension pot as a tax-free lump sum
  • You then move the rest into one or more funds that allow you to take a taxable income at times to suit you.
  • Once you’ve taken your tax-free lump sum you can start taking the income right away or wait until a later date.
  • If you take out this flexi-access drawdown arrangement, you will generally be able to take out 25% of the funds as a tax free lump sum at the outset

Uncrystallised Fund Pension Lump Sum (UFPLS):

  • Under this policy, you do not take the 25% lump sum payment up front
  • But each time you draw down a payment, 25% of it will be tax free
  • With a UFPLS the remaining 75% of each payment subject to income tax at your marginal rate.
  • If your current pension provider is not going to offer this, you will need to transfer your benefits to us

Taking SSAS Pension Benefits

SSAS Benefits: key information

If you have benefits in a defined benefits pension scheme and you wish to take advantage of flexiaccess drawdown you will need to consider very carefully as to whether this is in your best interests, as you will need to transfer out of your scheme and give up guaranteed benefits. If your accrued benefits exceed £30,000 you will also need to take independent financial advice regarding such a transfer as the pension scheme trustees will not be able to authorise a transfer until you have done this and so may not allow you to transfer.

  • Benefits aned Contributions

    Members in FAD may continue to make pension contributions, however, if they take any income they will be subject to the money purchase annual allowance of £10,000. Any contributions in excess of this will be subject to the annual allowance charge which will effectively remove the tax relief on the contribution.

  • Annuity option

    Members in FAD may choose to purchase an annuity with the proceeds of their fund at any time after taking their pension commence sum of 25%.

  • Options on death

    On the death of the original plan holder, the nominees will have the option to continue FAD as will their successors. The remaining funds can also be paid as a lump sum or be used to buy an annuity. As with all post 6 April 2015 death benefits, it is the age of the plan holder at their date of death that drives whether there will be a tax charge.

  • Lump sums

    If the member dies before age 75 the lump sum will be paid tax-free. If 75 or over the lump sum will be added to the nominated recipient’s taxable income and taxed accordingly.

Administering the Fund

Pension Loans SSAS Practitioner