Taking Benefits
Members can take benefits from their SSAS fund at any time from the age of 55 (rising to age 57 from 6 April 2028), or earlier in certain cases such as serious ill-health or if the individual has a protected pension age.
Member benefits: Income and tax-free cash
Member benefits will normally be taken as ‘flexi-access drawdown’, although other options permitted by HMRC, e.g. ‘capped drawdown’ or a ‘lifetime annuity’, are also available if required.
If you wish to take benefits then you must first ‘crystallise’ some, or all, of your SSAS fund.
You can then normally take a tax-free lump sum of up to 25% of the amount crystallised, subject to a maximum amount.
You can withdraw the remainder of the amount crystallised as one-off or regular income payments of any amount whenever you wish, subject to income tax under PAYE.
If you have taken any tax-free lump sum or income under flexi-access drawdown then you will be subject to a reduced Annual Allowance – the ‘Money Purchase Annual Allowance’ – and the carry forward facility will not be available.
Warning: Taking an income from a SSAS may reduce the value of your SSAS fund, especially if investment returns are poor and a high level of income is taken. This may result in lower maximum income in the future than would otherwise be the case. We strongly recommend that you seek professional advice from an adviser regulated by the Financial Conduct Authority if you are considering taking tax-free cash and/or income from a SSAS.
Death benefits
In the event of your death, then your SSAS fund can be used to provide benefits for your dependents or for individuals who you have nominated.
You can nominate the individuals, trusts and/or charities who you would like to receive any death benefit and the SSAS trustees will consider your wishes when deciding who will receive the benefit. However, your nomination will not normally be legally binding on the SSAS trustees.
Death benefits can be paid as a lump sum and/or income, and will normally be free from income tax if you die before your 75th birthday. The death benefits are currently normally free from inheritance tax but the Government is making substantial changes to the inheritance tax position of ‘unused pension funds’ in the event of death after 5 April 2027.