Submitted by Sestini & Co
| on Mon, 04/16/2018 - 7:30 | In Pensions
, Tax planning and pensions
You’re probably already familiar with auto-enrolment and how employees are automatically enrolled into a pension scheme into which both they, their employer and the government will all contribute.
Legally employers have to automatically enrol workers into a pension scheme and make contributions towards it, with some exceptions which we mentioned in an earlier blog.
Now all companies will now be involved in the scheme.
As we mentioned, the auto-enrolment scheme could have a positive effect for millions of people who may not otherwise have set up a pension and the contributions made by the employer and the government will mean an employees’ contributions are matched, thereby doubling the amount paid into the pension pot and even could potentially more than double the employee contribution.
The greater investment flexibility of a SSAS
There’s also been a lot of talk about Small Self-Administered Schemes (SSAS). In brief, a SSAS is an HMRC-registered pension scheme specifically designed for small businesses. The business owners and employees can be Trustees and members, which means they control the scheme and can give it more flexibility.
SSAS arrangements have greater investment flexibility than ordinary personal pensions but they have fewer regulatory duties attached to their administration than SIPPs (Self Invested Personal Pensions).
A SSAS can solve auto-enrolment issues for business owners and can be used effectively within a scheme, by offering a helpful pension arrangement for small businesses, bringing tax benefits, member control and the ability to grow funds in a tax-free environment.
Acceptable investments include stocks and shares, commercial property, and Trustees can even loan money to the scheme company and invest up to 5% of the fund value in the shares of the scheme company.
SSAS Professional Trustee
This type of pension scheme is relatively complex to set up and administer, however using a Professional Trustee such as Sestini & Co Pension Trustees Ltd will ensure a stress free pension set up, as you’ll be engaging administrators with a full understanding of scheme rules and tax and pension legislation.
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