Although most are fully aware of the more traditional personal pension options, as a director or business owner, there could be further options to consider for maximising your retirement savings. Two options which are often considered are a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS).
Self-Invested Personal Pension
A Self-Invested Personal Pension (SIPP) gives you the ability to invest in a wider range of investment options (within the rules of the SIPP provider). Your pension can be used to invest in stocks and shares, invest in collective investments as well as commercial property.
A business owner is also able to purchase their business premises within their SIPP and then rent it back. This option gives you greater control over your future, unlocks higher potential returns than standard savings accounts, and may benefit from tax reliefs.
Small Self-Administered Scheme
A Small Self-Administered Scheme provides all of the investment avenues and potential benefits of a SIPP but there are a few differences.
With a SSAS you and up to 10 others can also provide a loan facility back to your company. With a SSAS assets are pooled and members hold a proportionate percentage based upon their contributions or assets transferred into the pension.
The benefits of the SSAS are three-fold: as well as establishing a diversified investment portfolio, you are also able to provide affordable financing for your business, which can help with day-to-day running costs or even help accelerate growth. Also, the sponsoring employer can pay the SSAS fees.
Summary
As with any investments, the level of return is never guaranteed, and it is essential to seek advice based on your individual circumstances to ensure any decisions you make are in your best interest. The complex nature of both the above pension structures and the rules that must be carefully followed mean that they are not always suitable for everyone.
For further information on the above pension options or for more general financial advice, get in touch with a member of our financial planning team today by emailing enquiries@pmm.co.uk or calling 01254 679131.
A comment to note that the article does not constitute personalised advice and that advice should be sought before taking any action.
