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SSAS Versus SIPP

SSAS Versus SIPP Overview

It is often difficult to determine the key differences between SIPP and SSAS products, and this guide is aimed to assist in the process. Please note: these comments apply only to the Alltrust SIPP and Alltrust SSAS. Other providers in the market place may offer different options within their products.

SSAS Versus SIPP Details

Depending on what you need a SIPP to do the costs vary. For example there is our Oasis SIPP which allows the SIPP Bank Account and Platform One holding standard assets is a cheaper option than the full SIPP where a commercial property can be held.

	Small Self Administered Scheme	Self Invested Personal Pension
Investments	Full flexibility of investments, ranging from equities and unit trusts to more complex investments such as property, unlisted shares and loans. SSAS can grant secured loans to Sponsoring Employers, but not to other connected parties. Employer shares limited to 5% of scheme value. Subject to taxable property rules.	Full flexibility of investments, ranging from equities to unit trusts to more complex investments such as property and unlisted shares if employer it is restricted to HMRC limits). SIPPs can grant loans to unconnected 3rd party businesses.
Membership	All members are members of the same Scheme, and enjoy the same rights as each other. Membership is granted to individuals by the Sponsoring Employer of the SSAS.	Each member has his or her own individual arrangement. Group SIPPs can be established, whereby all members are members of the same Scheme, and which operates in a similar fashion to a SSAS.
Funding	Existing pension benefits from other registered pension schemes can be transferred in. Contributions can be made by an Employer, or by individual members. Individual members may need to obtain their own tax relief, depending on how the Scheme is set up. Contributions can be paid to an unallocated account for additional flexibility, although tax relief is not available until allocation to members.	Existing pension benefits from other registered pension schemes can be transferred in. Contributions can be made by an employer, 3rd party (if connection acceptable) or yourself. Investment growth is added to your pension as and when it is received.
Benefits	The member is entitled to their share of the assets within the SSAS, subject to the Lifetime Allowance. Benefits can be drawn from Flexi-Access Drawdown, Uncrystallised Funds Pension Lump Sum, Capped drawdown (if already in capped drawdown) and small pots / ill-health pensions if applicable. For income you may purchase an annuity, take a cash payment or an income payment directly from your pension once past age 55 (age 57 from April 2028).	The member is entitled to their all the assets within their SIPP, subject to the Lifetime Allowance. If a Group SIPP it will be their share of the fund. Benefits can be drawn from Flexi-Access Drawdown, Uncrystallised Funds Pension Lump Sum, Capped drawdown (if already in capped drawdown) and small pots / ill-health pensions if applicable. For income you may purchase an annuity, take a cash payment or an income payment directly from your pension once past age 55 (age 57 from April 2028).
Control	Assets are held jointly by the Company Trustee and the Member Trustees. A Scheme Administrator is appointed to deal with various HMRC matters. The Sponsoring Employer usually has a high degree of control in relation to appointment of Trustees and amendments to rules.	Assets are held by the Company Trustee. A Scheme Administrator is appointed to deal with various HMRC matters. The Company Trustee will have the highest level of control in relation to the powers of the Scheme.
Legislation	The Scheme is established as a single Scheme in its own right, and has to be registered with HM Revenue & Customs. It is an occupational Scheme and is subject to Pensions Act and DWP requirements. The Scheme is not regulated, and there are no requirements to report to the Financial Conduct Authority.	Each Member belongs to a single Scheme, which is already registered with HM Revenue & Customs. It is a Personal Pension Scheme, and is exempt from many Pensions Act requirements. The Scheme is regulated, and there are requirements to report various matters to the Financial Conduct Authority, and undertake certain regulatory processes.
Fund Calculation	Each Member of the Scheme has benefits calculated in relation to the contributions and transfers paid on their behalf. There is normally no direct allocation to Members of any of the underlying assets, and the Scheme operates as a common trust fund.	Each Member’s SIPP will specifically ‘own’ the assets held within it. In the case of property, for example, this means that joint ownership will result in fixed amounts of the property being held by each SIPP.
Costs	As a standalone scheme, set up and running costs are generally higher. Transactional costs are typically charged on a Scheme basis, which means that the Scheme can be more cost effective where shared assets are acquired, such as property.	Depending on what you need a SIPP to do the costs vary. For example there is our Oasis SIPP which allows the SIPP Bank Account and Platform One holding standard assets is a cheaper option than the full SIPP where a commercial property can be held.

Small Self Administered Scheme

Self Invested Personal Pension

Investments

Full flexibility of investments, ranging from equities and unit trusts to more complex investments such as property, unlisted shares and loans.

SSAS can grant secured loans to Sponsoring Employers, but not to other connected parties. Employer shares limited to 5% of scheme value. Subject to taxable property rules.

Full flexibility of investments, ranging from equities to unit trusts to more complex investments such as property and unlisted shares if employer it is restricted to HMRC limits).

SIPPs can grant loans to unconnected 3rd party businesses.

Membership

All members are members of the same Scheme, and enjoy the same rights as each other.

Membership is granted to individuals by the Sponsoring Employer of the SSAS.

Each member has his or her own individual arrangement.

Group SIPPs can be established, whereby all members are members of the same Scheme, and which operates in a similar fashion to a SSAS.

Funding

Existing pension benefits from other registered pension schemes can be transferred in.

Contributions can be made by an Employer, or by individual members.

Individual members may need to obtain their own tax relief, depending on how the Scheme is set up.

Contributions can be paid to an unallocated account for additional flexibility, although tax relief is not available until allocation to members.

Existing pension benefits from other registered pension schemes can be transferred in.

Contributions can be made by an employer, 3rd party (if connection acceptable) or yourself.

Investment growth is added to your pension as and when it is received.

Benefits

The member is entitled to their share of the assets within the SSAS, subject to the Lifetime Allowance.

Benefits can be drawn from Flexi-Access Drawdown, Uncrystallised Funds Pension Lump Sum, Capped drawdown (if already in capped drawdown) and small pots / ill-health pensions if applicable.

For income you may purchase an annuity, take a cash payment or an income payment directly from your pension once past age 55 (age 57 from April 2028).

The member is entitled to their all the assets within their SIPP, subject to the Lifetime Allowance. If a Group SIPP it will be their share of the fund.

Benefits can be drawn from Flexi-Access Drawdown, Uncrystallised Funds Pension Lump Sum, Capped drawdown (if already in capped drawdown) and small pots / ill-health pensions if applicable.

For income you may purchase an annuity, take a cash payment or an income payment directly from your pension once past age 55 (age 57 from April 2028).

Control

Assets are held jointly by the Company Trustee and the Member Trustees.

A Scheme Administrator is appointed to deal with various HMRC matters.

The Sponsoring Employer usually has a high degree of control in relation to appointment of Trustees and amendments to rules.

Assets are held by the Company Trustee.

A Scheme Administrator is appointed to deal with various HMRC matters.

The Company Trustee will have the highest level of control in relation to the powers of the Scheme.

Legislation

The Scheme is established as a single Scheme in its own right, and has to be registered with HM Revenue & Customs. It is an occupational Scheme and is subject to Pensions Act and DWP requirements.

The Scheme is not regulated, and there are no requirements to report to the Financial Conduct Authority.

Each Member belongs to a single Scheme, which is already registered with HM Revenue & Customs. It is a Personal Pension Scheme, and is exempt from many Pensions Act requirements.

The Scheme is regulated, and there are requirements to report various matters to the Financial Conduct Authority, and undertake certain regulatory processes.

Fund Calculation

Each Member of the Scheme has benefits calculated in relation to the contributions and transfers paid on their behalf.

There is normally no direct allocation to Members of any of the underlying assets, and the Scheme operates as a common trust fund.

Each Member’s SIPP will specifically ‘own’ the assets held within it. In the case of property, for example, this means that joint ownership will result in fixed amounts of the property being held by each SIPP.

Costs

As a standalone scheme, set up and running costs are generally higher.

Transactional costs are typically charged on a Scheme basis, which means that the Scheme can be more cost effective where shared assets are acquired, such as property.