Often seen as the poor relation to the self-invested personal pension (Sipp), small self-administered schemes (SSASs) have seen a revival over the past 18 months. With takeovers and unsupported clients returning to be a trustee, there has been some change for the product.
A SSAS is a type of occupational pension scheme, set up by an employer for a select number of its directors. Differing from Sipps, SSASs are separate schemes for employers and costs are not charged per member, but per scheme instead.
But how else do they differ? A Sipp can be set up by any individual, but a SSAS is almost like the Sipp’s more exclusive sister, in that only company directors are able to set one up, and a limited number of just 12 people can join, including its founder.
As the name suggests, SSASs are self-administered; meaning the founder of the scheme – the company director – is also its trustee, unlike a Sipp, where the provider is the trustee.
Typically, initial set up charges are more expensive for a SSAS. October 2013’s Money Management Sipp survey showed the average initial charge for a Sipp lies at roughly £180, but this year’s SSAS survey shows a set up charge of between £500 and £2,000.
As well as being a more expensive option, SSASs come with obstacles. Until 6 April 2006 (A-Day), it was a requirement of HM Revenue & Customs that a professional trustee (known as a ‘pensioneer trustee’) must be appointed. But this is no longer a requirement – although some providers may still insist on it – and has led to under-qualified trustees incurring penalties due to problems that could have been avoided under proper regulated supervision.
Whatever issues SSASs face, the industry is still growing at a fast rate and hundreds of schemes are being set up each year.
It should be noted that all figures in this year’s survey are as at 1 December 2013, unless otherwise specified.
One noticeable absence from this survey is Hornbuckle Mitchell, one of the SSAS industry’s largest providers. The firm said due to “structural changes” it would not be participating. Last year, it had the fifth largest amount of funds under management.
New beginnings
Table 1 shows the assets under management for all providers. The Table also shows how many SSASs were set up over each of the past four years. As with all parts of the survey, it is down to the discretion of the scheme as to whether or not it provides this information.
Some firms did not disclose their assets under management, but did provide how many schemes were set up. Just Channack Consultancy Co and Oval Trustees decided to only provide the total number of SSASs they respectively have on their books. One firm, Nigel Sloam & Co did not provide any information for this section of the survey.
As with any survey, the number of participants always varies, and the amount of information supplied differs. But according to our figures, the total number of SSASs set up in 2013 grew by almost 200 compared to 2012. And since 2010, the number of SSASs set up more than doubled, from 376 in 2010 to 870 in 2013.
