SSAS Pensions Explained: Loans to the Company and Commercial Property

A SSAS is an occupational pension scheme established under trust by a sponsoring company. MoneyHelper notes that these schemes usually allow up to 11 members, and they are most often found in family and owner-managed businesses. Because the members are normally the trustees, investment decisions are made by the directors themselves, typically with a professional administrator handling the paperwork and HMRC reporting.

Contributions can be paid by the company and by the members, and the normal pension tax rules apply. The annual allowance for 2026/27 is £60,000, and our article on pension contributions for company directors explains how employer contributions are usually treated. Benefits cannot normally be taken before the normal minimum pension age, which rises from 55 to 57 on 6 April 2028.

A SSAS is not regulated by the Financial Conduct Authority, although its trustees must be registered with The Pensions Regulator. MoneyHelper's guide to small self-administered schemes covers the basics.

A SSAS can lend to the company that sponsors it, and this is often the feature that draws business owners to it. HMRC's Pensions Tax Manual treats such a loan as an authorised payment only if it meets all of these conditions:

• the loan is no more than 50% of the scheme's cash and the net market value of its other assets
• the term is no longer than five years
• the loan is secured throughout its term by a first charge on an asset
• interest is charged at no less than 1% above the average base lending rate of six specified high street banks
• the loan is repaid in at least equal instalments of capital and interest for each complete year

When those conditions are met, the company has access to capital and the interest is paid back into the pension. When they are not, the loan can be treated as an unauthorised payment. The loan also carries ordinary commercial risk. If the company cannot repay, the pension bears the loss, and in a small scheme that loss falls on the same people who run the business.

Commercial property is one of the most common SSAS investments, and the property is often the company's own premises. HMRC places no general restriction on the types of asset a registered pension scheme can hold, and commercial property is not classed as taxable property. Where the company occupies a building owned by its SSAS, it pays the scheme a commercial rent, and that rent becomes part of the pension fund.

A SSAS can also borrow. HMRC allows a registered pension scheme to borrow up to 50% of the net value of its fund, measured immediately before the borrowing. Borrowing above that level is treated as a scheme chargeable payment and taxed.

Property brings its own characteristics. It is illiquid, it can concentrate a large part of the pension in a single asset tied to a single business, and it has to be reconciled with the way members eventually take their benefits. Our article on how to take pension income in retirement explains the options that apply once benefits are drawn.

HMRC treats residential property and tangible moveable property, such as cars, art, wine and jewellery, as taxable property for a scheme of this kind. If a SSAS acquires taxable property, the member faces an unauthorised payments charge of 40% and the scheme faces a scheme sanction charge. There are narrow exceptions, including a caretaker's flat that forms part of commercial premises.

The Pensions Regulator has noted that the ease of setting up a SSAS has made it attractive to scammers, and MoneyHelper warns against joining a scheme with no genuine connection to the employer. Unsolicited offers of early access to a pension, or of a pension "loan", are a common feature of these approaches. Our guide to checking whether a firm is FCA authorised explains how to look up a firm on the Financial Services Register.

A SIPP can also hold commercial property, and in a SIPP the provider acts as trustee and carries out most of the administration. What a SIPP cannot do is lend to the member's company, and it holds one member's pension rather than pooling several. A SSAS offers both of those features, and in return its members take on the duties of trustees. Our article on SIPPs and personal pensions explains how a SIPP is set up.

Running costs differ too. A SSAS usually involves a professional administrator, and the cost of that relative to the size of the fund is part of how the two structures are compared.

From 6 April 2027, most unused pension funds and pension death benefits will form part of a person's estate for inheritance tax. For company owners, that brings the pension into the same conversation as business succession and the rest of the family's estate, whichever type of scheme holds it. Our article on pensions and inheritance tax from 2027 explains the change.

Because the rules are technical and the consequences of breaching them are expensive, directors setting up a SSAS commonly work with a specialist administrator and take regulated financial advice.