15:00 PM, 16th August 2024, About 3 months ago
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Standard pensions often bring to mind confusing jargon and offer little to no control but imagine a pension that changes all that.
A Small Self-Administered Scheme (SSAS) offers full financial control and helps leave a legacy for your family.
SSAS pensions are particularly beneficial for property investors and developers as they are exempt from inheritance tax.
Property investors have successfully used SSAS pensions to achieve incredible goals that wouldn’t have been possible otherwise, such as transforming run-down, unmortgageable properties into homes for families.
WealthBuilders can help property investors, and anyone interested in creating and understanding a SSAS pension and explore how it can boost your financial future.
Kevin Whelan, the founder of WealthBuilders, turned personal tragedy into a mission to help others achieve financial freedom. The birth of WealthBuilders was sparked by the untimely death of Kevin’s father in his 40s.
Kevin explains: “My father was a successful business owner who provided agency staff for big companies like Shell and BP.
“We were doing well until his unexpected death. Unfortunately, he didn’t have a Will, life cover to protect the mortgage or a business succession plan. This left our family not only coping with a profound loss but also facing severe financial setbacks.
“Me and my father were two genetic peas in a pod, and his early death made me realise I needed to consider my own future if I were to go at such a young age.
“The birth of my wealth thinking then came to never trade time for money but to build assets instead.”
Kevin adds that he began to build the Wealthbuilders programme after the 2008 financial crash.
He tells Property118: “It took about 15 years for me to become financially independent, and I saw how many people around me struggled with trading time for money—working for income rather than owning assets that generate income.
“I began coaching people one-on-one, and it worked so well that I decided to create a programme. This was around 2008, during the financial market crash.
“As an Independent Financial Advisor (IFA), I saw people lose the value of their investments overnight. Realising that being an IFA wasn’t the best way to help, I combined my skills with others to create educational programmes focused on building wealth through assets.”
Kevin tells Property118 that a SSAS pension is tax-efficient and unlike any other pension scheme.
He said: “SSAS has nothing to do with the armed forces or computer software — it’s simply a pension plan for business owners.
“Unlike other pensions, a SSAS is a tax-free trust fund and not subject to capital gains tax, inheritance tax, or corporation tax.
“The real challenge with many pensions is that you often hand over control to an insurance company or adviser, leaving you in the back seat. A SSAS pension changes that by putting you in the driver’s seat.”
Kevin adds it’s important for people to know that a SSAS pension is not for everyone but offers more control and flexibility.
He explains: “At Wealthbuilders, we provide the guidance and confidence you need to be a trustee of your SSAS, much like running a limited company. If you can manage a limited company, you can manage a SSAS.
“While it may not be for everyone, as to be eligible for a SSAS pension, you must be part of a limited company.
“For example, you can lend up to 50% of your SSAS funds to your limited company. If you have a SSAS with up to 11 members—like family or business partners—you can pool resources. For instance, if two members each contribute £100k, creating a total pot of £200k, up to £100k—50% of the total—can be loaned to their company.
“The real benefit is being able to grow your wealth today rather than waiting until your 50s or 60s. You can transfer traditional pensions into a SSAS if you have a limited company and are ready to take charge.”
Kevin explains what property investors can do with a SSAS pension.
He says: “At WealthBuilders, we help you think outside the box. Instead of just filing away your pension statements in a drawer and wishing it could be better, we show you how to use your funds to build wealth now. an
“With a SSAS, you could buy commercial property, do property conversions from commercial to residential, work on building projects, or even lend money to developers or property professionals, the options are endless.”
Kevin says a good starting point for a SSAS pension is around £50,000 but each case is different.
He said: “You need to have a limited company making at least £50,000 in profit or have £50,000 to invest in the pension. Plus, you must be willing and able to learn the process.
“You can’t just dive in—you need a plan. It typically takes around four to five months to set up a SSAS pension so during that time you need to think about what you are going to do with that money and who you are going to work with.
“You can invite grown up children into the SSAS pension and they can participate and learn.
“For example, a husband and wife could include their 22-year-old child in the scheme. The child can either actively participate or observe, receiving guidance and challenges from the parents, who can then execute the plan.
“It’s very much an intergenerational plan and a tax planning tool as the next generation inherits the pension and doesn’t have to worry about corporation tax, capital gains tax or inheritance tax.”
There have been many success stories with SSAS pensions. For example, Kate and Toby Spanier won the SSAS Property Investor of the Year at the 2023 Property Investors Awards.
The couple tackled a significant challenge that would have been impossible without their SSAS pension.
The couple bought a derelict, unmortgageable property in Kent that needed nearly £50,000 in refurbishment.
Without their SSAS loanback, they couldn’t have purchased the property in cash or covered the extensive refurbishment costs. Kent County Council provided a £40,000 interest-free loan to help restore the property. Kate then remortgaged to recycle 100% of their funds.
Kevin explains that Toby was so inspired by their success that he is now a coach in the Wealthbuilders programme.
He said: “Kate and Toby were clients of Wealthbuilders, and Toby was so inspired he became a coach in our programme. I remember them coming to see me, thinking a SSAS pension was too good to be true, but they decided to explore it anyway. After thorough research, they realised it was perfectly legitimate and approved by HMRC.”
Kevin says a SSAS pension offers a fantastic opportunity for property investors and helps build wealth.
He said: “It’s not just about the awards; it’s about the significant impact a SSAS pension can have on people’s quality of life and wealth. For the right people, this is an outstanding opportunity.”
For more information on how to set up a SSAS, reach out to the experts at WealthBuilders. The Wealthbuilders team are here to help you navigate the complexities and ensure you get the most out of your SSAS pension.
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