The scheme pays you in cash, so the first question is where the cash comes from
A SSAS holds whatever the trustees have bought: commercial property, a loan out to the sponsoring company, deposits, listed investments, sometimes bullion. A benefit payment leaves as a bank transfer, so before anything is paid the trustees have to know which assets will produce that money, and when.
Three positions come up again and again.
- The scheme already holds the cash. Rent, loan repayments and contributions have built up in the scheme bank account, and the payment comes out of that balance. Nothing is sold.
- The scheme pays out of its income. Rent from a commercial property, or the capital and interest coming back on a loan to the sponsoring employer, funds the payments as it arrives.
- The scheme is fully invested. Either something is sold, or the payments are phased to match the income the scheme receives.
What usually gets kept, and what usually gets sold
This is a trustee decision and it belongs to the members. What we do is set out the mechanics so it is taken with the full picture.
- The trading premises. Selling the building the company trades from is rarely what anyone wants, because the company would then need a new landlord. Where it is kept, the rent it already pays into the scheme funds the payments.
- Property held jointly or in part. A scheme cannot sell a corner of a building, so phased payments funded by rent are usually how it is handled rather than a sale.
- A loan out to the sponsoring employer. A loanback runs on its agreed terms, over a maximum of five years, in at least equal annual instalments of capital and interest. The trustees cannot demand it back early to fund a payment, although the company can repay ahead of schedule if it has the cash. Those repayments become a funding line, and the final repayment date often decides when a larger payment is possible.
- Deposits and listed investments. The quickest to turn into cash, and usually where a one-off lump sum comes from.
In a multi-member scheme the assets are held for the scheme as a whole, but each member has their own share. Paying one member does not give them a claim on a particular asset, it reduces their share, and the trustees have to show it came out of the right member's share.
What the trustees have to agree
In a SSAS the members are normally the trustees, so paying benefits is a trustee decision taken together, not an instruction one person gives to a provider. Before a payment is made, the trustees have to agree and record:
- that the member has reached minimum pension age, or meets one of the limited exceptions
- how much is being paid, and whether it is a tax free lump sum, taxable pension income, or both
- which of that member's funds it is drawn from, and how their share is reduced
- how the payment is funded, including any sale, and the valuation relied on
- that the scheme can still meet its other obligations afterwards, including any mortgage repayments
A current valuation sits behind most of this. Where the scheme holds property, that means a current valuation of it, not a figure carried forward from an earlier year.
How the scheme actually makes the payment
As scheme administrator, this is the part we run.
- We confirm what is available. The member's age, the funds held for them, and whether any protection certificate applies.
- We prepare the paperwork. The member's election, the trustee resolution, and the record of how the funds are designated.
- We designate the funds. The amount drawn against moves from uncrystallised to crystallised in the member's record. Anything left undesignated carries on as before.
- The tax free element is paid. Up to 25% of the amount crystallised, free of Income Tax, within the member's lump sum allowance.
- PAYE is operated on the taxable part. The scheme is the payer, so it deducts Income Tax before the money reaches the member, and reports the payment to HMRC in real time.
- The trustees release the money. The transfer is made from the scheme bank account. The trustees hold that mandate, so it moves when they authorise it.
- It goes into the records, the scheme returns and the member's own.
The rule detail worth knowing before you plan
- Earliest age. Benefits can be taken from 55. From 6 April 2028 that rises to 57. A small number of members hold a protected pension age and can draw earlier, either from rights held before 6 April 2006 or, for the rise to 57, from an unqualified right written into the scheme rules. We check whether either applies to you.
- The tax free element. Up to 25% of the amount crystallised, free of Income Tax, capped by the lump sum allowance of £268,275 across all of the member's pensions. HMRC protections may give a higher figure.
- Everything else is pension income, taxable through PAYE.
- Nothing has to be taken at once. Funds can be crystallised in stages.
- What is not drawn keeps working. Income and gains on the scheme investments are not taxed, so undrawn funds carry on compounding.
- Ill health. Benefits can be taken before minimum pension age in limited circumstances, with medical evidence.
Timing to plan for
The pace is set by whichever asset is funding the payment.
| What has to happen | What sets the pace |
|---|---|
| Bringing the member records and the scheme valuation up to date | Whether a current valuation exists, and whether scheme property needs revaluing |
| Getting the trustee agreement signed | Every trustee signs. Often the slowest step where members are in different places |
| Freeing up the cash | Nothing if the scheme already holds it. Days for deposits and listed investments. Months for a commercial property sale, which then controls everything else |
| Setting the scheme up with HMRC for PAYE, where it has not paid a pension before | A one-off step, done the first time only |
| The payment itself | Same day, once the trustees authorise it from the scheme bank account |
The first payment takes far longer than the ones that follow. Where a property sale or a loan repayment is funding it, the date is decided months ahead. If there is a date you want the money by, tell us early.
Taking benefits while the scheme still owns the property
This is the position a lot of our clients are in: the scheme owns the premises, the company pays rent into the scheme, and the member wants an income without disturbing any of it.
Rent on commercial property held by a SSAS and let at a commercial rent is not taxed, so all of it accumulates in the scheme bank account and is available to fund payments. The building stays where it is, the company keeps its premises, and the income comes out of the rent rather than a sale. The only limit is arithmetic: the payments cannot outrun what the scheme receives.
What we handle, and what stays with you
We handle the administration: the benefit paperwork, the designation of funds, PAYE and real time reporting, the HMRC returns, and the scheme records.
You handle the decisions, because you are the trustees: whether to draw, how much, and what is sold or kept to fund it. We are a pension specialist and the scheme administrator, not an investment manager. What we make sure of is that the payment is properly documented, taxed and reported.
- A SSAS pays you in cash, so the first thing to settle is which asset produces it.
- Every trustee has to agree the payment, and it has to be recorded.
- The scheme deducts Income Tax under PAYE before the money reaches you.
- Where a property or a loanback is funding the payment, its timetable sets yours.
- Benefits can be taken from age 55, rising to 57 on 6 April 2028.
A free, no-obligation call. We will look at what your SSAS holds and how a payment would be funded.