SIPP vs SSAS: The 5 Differences You Need to Know

These are 5 important differences between SIPP and SSAS that could change the way you think about your pension.

To some pensioners, the current state of affairs for UK pension legislation might seem like a jumbled mess. The regulations never seem to stop changing, and new fees seem to pop up everywhere you turn. Rest assured, however, there is some logic to it all.


Case in point: lots of people are often confused by two very similar-sounding acronyms: SIPPs (Self-Invested Personal Pensions) and SSASs (Small Self-Administered Schemes). In some ways, they are indeed similar. They’re both pension schemes tied to investments. Plus, the tax rules are basically the same for both.

However, when held up to the light, these two kinds of pension schemes—SIPPs and SSASs—are clearly distinguishable from one another. Not sure you see the light? You’re not alone.

Nevertheless, there are only a handful of differences, and they’re not difficult to understand. All it takes is a clear outline of each, which we’ve provided below.

Here are the five major way in which these two types of pension schemes differ.

1. Investments

SSAS: One of the attractive features of a Small Self-Administered Scheme (SSAS) is that business owners get more control over how employee pension funds are invested. SSASs are occupational pension schemes whose members are employees of the employer who sponsors the scheme.

SSASs have more flexibility in that they allow investment in the company itself (up to 5%). This is not possible through SIPPs simply because there is no sponsoring company.

SIPP: This is a Self-Invested Personal Pension, so there is no sponsoring employer. Although it is a personal saving plan, the member’s employer may also make contributions. These employer contributions may take place through payroll deduction if they choose to do so.

SIPP members have greater control over their own schemes. For example, they may choose to invest in non-insured assets (e.g., property) as well as insured assets. They may also choose to invest 100% of their fund in their own company, or any other company, for that matter.

2. Setup

  • SSAS schemes are set up by employers.
  • SIPPs are set up by insurance agencies or by special SIPP operators.

3. Running Costs

For SIPPs, there are some basic eligibility requirements to be met. These will be set by each individual provider. They involve a minimum investment amount. The reason for this is because SIPPs can be slightly more expensive to manage when compared to a standard personal pension plan.

4. Availability/Access

Anyone may open a SIPP, but they’ll need to do so through an insurance company or a specialized SIPP operator.

SSAS schemes are typically only open to employees through the sponsoring employer.

5. Lending Money

SSAS schemes may lend money to the sponsoring employer, but SIPPs do not allow loans of any type.

A Final Word on SIPPs and SSASs

Pensioners with a firm grasp of how these two retirement schemes work will be well equipped to make important decisions about retirement. We hope we’ve helped you understand these two important pension schemes.

Should you require more information, help with setting up a SIPP, or answers to your overseas pension questions, please call us at 1-888-978-2147 .