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Contributions & Allowances

Annual Allowance and Lifetime Allowance


Making a contribution to your SSAS is an extremely tax-efficient way of funding your pension from your company. 

Contributions qualify for corporation tax relief and are not subject to Income Tax or National Insurance. 

The company can contribute up to the Annual Allowance for every member of the scheme. 

The maximum amount a member may accumulate is subject to the Lifetime Allowance.

The Lifetime Allowance (the sum of all pension arrangements) is the amount below which you benefit from the tax-exempt status of pensions.  The Lifetime Allowance is relevant to everyone, except if you have pre-2009, pre-2012, pre-2014 or pre-2016 'enhanced' or 'fixed' protection.  In addition, individuals who had pension savings of greater than £1,250,000 on 5 April 2014 can apply for individual protection 2014, providing they don’t have existing primary protection. Individual protection 2014 gives individuals a protected lifetime allowance equal to the value of their pension savings on 5 April 2014, subject to an overall maximum of £1.5 million.  Individuals have up to 5 April 2017 to submit their Individual Protection 2014 online application to HMRC.  

Company contributions may need to be justified to the local Inspector of Taxes as being relevant to the members involvement in the business.

The Annual Allowance includes all of a member's pension contributions. Contributions to other pension arrangements need to be deducted from the Annual Allowance in order to calculate the maximum allowable contribution to the SSAS.

Higher earners need to be aware of changes from 6 April 2016. The amount they can invest in a pension and on which they receive tax relief fell to as little as £10,000. This includes company contributions to a SSAS, or any other pensions, on their behalf. Earners are affected if their income is more than £150,000, although those with lower incomes could also be caught. There are two new definitions of income. These are Adjusted Income and Threshold Income. Adjusted Income: All taxable income (e.g. salary, bonus, BIK, self-employed earnings, pension income and investment income such as dividends, rent and interest) PLUS pension contributions. Threshold Income: All taxable income as above but NOT pension contribution (unless paid under a salary sacrifice arrangement where an employee deliberately receives a lower income in exchange for pension contributions). Where Adjusted Income is £150,000 or more AND Threshold Income is over £110,000 then the Annual Allowance reduces by £1 for every £2 of earnings. This means that when Adjusted Income reaches £210,000, the Annual Allowance reduces to £10,000. The minimum Annual Allowance is £10,000 thereafter. 

Please note that if you take income from your pension (excluding tax free cash), other than via any relevant Capped Drawdown limits, your annual allowance will reduce to £4,000.00. 


Tax Year Annual Allowance Lifetime Allowance
2018/18 £40,000 £1,000,000
2018/19 £40,000 £1,000,000
2019/20 £40,000 £1,000,000

Making contributions as physical assets (in specie contribtions)