Retirement alert: Britons urged to 'take care' & check for 'most suitable' pension scheme

NOW THAT auto-enrolment has pushed a legal obligation on business-owners to offer a workplace pension for employees, many have found they want greater influence over how the money in pension pots is invested.

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There isn’t a vast amount of difference between a SSAS and a SIPP scheme as they are largely governed by the same rules and laws; where they do differ is on how the law are applied to them.

On SIPPs and SSAS, Claire Trott, divisional director of Retirement and Holistic Planning at St. James’s Place, said: “Care should be taken to always ensure that the most suitable pension scheme is used.

“Just because it was suitable X number of years ago doesn’t mean that it still is.

“These things should be kept under constant review.”


A small self-administered scheme (SSAS) is a workplace pension scheme of no more than 11 members.

They are the most often used by small business owners who want more say in investment decisions or wish to pool their resources so they can make investments in commercial property.


Make sure you make the right pension decision (Image: Getty)

The members are usually directors or employees of the same company and they are able to make loans to that company.


A self-invested personal pension (SIPP) is a personal pension plan where the individual member has greater control over investment choices.

They are set up by an insurance company of dedicated SIPP operator and can be taken up by anyone who meets their eligibility criteria.


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The upfront costs of a SIPP are usually smaller than an SSAS, but as the costs of the latter are diffused among a larger group, they become cheaper over time than a SIPP.

However, a SIPP offers the individual running it complete control over investment decisions, not a joint decisions among trustees.

Among other factors, a decision weighing up the benefits of greater flexibility versus greater individual control will have to be made.

Royal London, a pension provider said: “A SSAS has more flexibility than a SIPP when it comes to investment.

“This is because current legislation allows investments to be made in the sponsoring employer. A SIPP doesn’t have a sponsoring employer, although any employer can contribute to it, but a SSAS does.

Ms Trott said: “There is no point in the complexity or cost associated with certain schemes if there is no need for them.

“For instance, if you are only investing in a collection of funds then a bespoke SIPP or SSAS aren’t the best vehicle.


People will need to weigh up flexibility versus control, among other factors (Image: Getty)

“It does become expensive to try and move schemes that contain property from SIPP to SSAS or even between SIPP providers, so doing your research and getting good advice at the outset can prevent upset and cost down the line.”

Ultimately, Ms Trott stressed that there is no single solution to the question of which type of pension will suit people best and everyone’s unique factors need to be considered in the decision.

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