Taking control of my pension as a company director

Overview

SSAS case study – Alistair. Alistair, 54, a company director from Oxfordshire, came to TLPI wanting to understand a pension that had been managed on his behalf and that he had little visibility of. He transferred into a SSAS, took on the role of trustee, and has since used the scheme to make a loan to his own business. He shares here how straightforward he found the process.

The situation

Alistair told us: “My pension was formerly managed by a financial advisor. I didn’t really understand it all, which I’m told is a familiar story for many people. It was during a business networking meeting that I learned that, as a company director, I didn’t have to wait until I was 55 to take control of my own pension.”

How?

As a company director, HMRC rules meant that Alistair could transfer his pension into a SSAS and take on the role of trustee. As trustees, he and his co-trustees decide what the scheme holds.

“I made the decision to transfer out immediately. I also discovered that the scheme could make a loan to my own company, and so I am in the process of arranging one. My company will then have a cash injection to help with the day to day running. The key to all of this is that I am in control of my pension funds now. I choose what I do and when. The amount of flexibility and control I have gained is incredible.”

A loan from a SSAS to a sponsoring employer has to meet the HMRC conditions on amount, term, interest rate, repayment and security. TLPI administers the scheme and checks that those conditions are met.

The result

Alistair reduced his costs substantially by moving to a SSAS. He now pays a single fixed fee each year rather than a percentage of his fund.

“I feel this is much fairer. I pay a fixed fee regardless of the size of my pension. Many people are paying too much for very little in return.”

He also found the move itself easier than he had expected. “Much to my surprise, it’s an incredibly straightforward process.”

What happened next?

As he approached his 55th birthday, his attention turned to his 25% tax-free lump sum. “With TLPI administering the scheme, I planned ahead so that I could access my lump sum at 55. I had personal plans for this money, paid out to me within a few days of turning 55 – a nice birthday treat indeed.”

If you are a company director who wants to understand how a SSAS works, and what it means to act as a trustee of your own scheme, speak to TLPI. TLPI administers SSAS pensions and does not advise on investments. What the scheme holds is a decision for the trustees, and some pension transfers require regulated advice before they can proceed.