Making

Contributions

Members and their employers can make one-off or regular pension contributions to their SSAS, and these will be eligible for tax relief , subject to certain conditions.

The maximum total contributions for a member (including those from their employer) that will be eligible for tax relief against their income from employment or self-employment in any tax year is the Annual Allowance for that year – this is £40,000 for the 2020/2021 tax year, although this will be reduced on a tapered basis for high earners.

Individuals who have been a member of a registered pension scheme can carry forward any unused Annual Allowance (again, reduced on a tapered basis for high earners) from the previous three tax years.

There are other rules and restrictions  that it is important to be aware of, including the following:

  • The Annual Allowance is reduced to £4,000 (the ‘Money Purchase Annual Allowance’) for the 2020/2021 tax year for individuals who have taken any tax-free lump sum or income under flexi-access drawdown.
  • The carry forward facility is not available for individuals who have taken any tax-free lump sum or income under flexi-access drawdown.
  • If a member has any pension protection then this may be lost if any contributions are made to the SSAS, or to any other pension arrangements, by or for the member.

Making

Transfers

Members can normally transfer benefits from other pension arrangements to their SSAS, which can accept in-specie asset transfers as well as cash transfers.

When considering a transfer to a SSAS from another pension arrangement, the member should consider the benefits that they would be giving up and any costs and charges associated with the transfer. In addition, if a cash transfer is being made then the member’s pension fund may be out of their preferred investment market for a period of time while the transfer is being effected. The member will bear the risk of market movements during this period.

Warning: We strongly recommend that that if you are considering a transfer then you should obtain professional guidance from an adviser regulated by the Financial Conduct Authority before proceeding in order to gain a comprehensive understanding of any potential risks.