If you’re a business owner, you’ve probably heard that your pension can do more than sit in a fund. But what does that actually mean and can you use your pension to support your company?
The answer is yes, if you have a SSAS pension, you may be able to loan money from your pension to your own company, creating liquidity without sacrificing long-term planning. It’s called a SSAS loanback and when used correctly, it can unlock powerful financial flexibility while keeping your retirement goals intact.
Let’s break down exactly how it works and whether it could be right for you.
Unlocking the Power of Your Pension
Most pensions are locked away until retirement. But a SSAS (Small Self-Administered Scheme) is different. It’s a pension scheme designed for directors of limited companies and it comes with strategic advantages, like the ability to invest in commercial property, combine pensions with other directors and loan money back to your company.
This isn’t about draining your retirement. It’s about making your pension work harder now, while still protecting your future.
What Is a SSAS Loanback?
A SSAS loanback is when your SSAS pension lends money to your limited company.
It’s structured like a normal loan: your company receives a cash injection and repays it to the pension over time, with interest. This allows your business to access capital without going to the bank, while your pension grows from the interest paid.
It must be used for genuine business purposes, and HMRC has clear rules. But when done properly, it’s one of the few legal ways to access pension funds pre-retirement.
How Does It Work in Practice? Step-by-Step
Here’s a simple breakdown:
- Your SSAS is set up and funded (via transfers or new contributions)
- You apply for the loan from the SSAS to your company
- The trustees (you and any others) agree the terms
- Up to 50% of the net SSAS value can be loaned
- Maximum 5-year term
- Minimum 1% above base rate interest
- Capital and interest must be repaid annually
- The loan must be secured against a tangible asset (e.g. commercial property, residential property in certain circumstances, company shares or charge over land)
- Funds are released to your company for approved business use
- Repayments are made back into the SSAS, growing your pension pot
It’s a fully compliant strategy and one that GoldHouse helps clients structure every day.
Key Benefits for Business Owners
- Access to cash without bank borrowing
- Interest payments stay within your ecosystem (growing your pension)
- Better control and flexibility
- No need to dilute equity or bring in external investors
- Can support growth, cash flow, acquisitions or refinancing
When used as part of a wider strategy, alongside holding companies or property investment, SSAS loanbacks can build both personal and business wealth.
Loanback vs Pension Withdrawal: What’s the Difference?
Many people confuse loanbacks with pension withdrawals but they are very different:
| SSAS Loanback | Pension Withdrawal | |
|---|---|---|
| Age restriction? | No – available regardless of age | Usually from age 55 (57 from 2028) |
| Taxable? | No – interest repaid to SSAS is tax-free | Yes – withdrawals are taxable (after 25%) |
| Retirement impact? | Preserves long-term pot and growth | Reduces pension fund value |
| Purpose | For business growth | For personal income |
Loanbacks are not a shortcut to taking money out, they’re a way to strategically invest it back into your business.
Are You Eligible for a SSAS Loanback?
To qualify, you must:
- Be a UK limited company director
- Have a SSAS set up and funded (we can help with this)
- Have a valid business use for the loan
- Be able to repay the loan with interest
- Provide suitable security for the SSAS
If you’re unsure whether your plans qualify, the GoldHouse team can walk you through eligibility, setup and strategy.
Final Thoughts: Should You Explore This Option?
If you’re a director with ambitious growth plans, but limited access to funding or you’re sitting on pension funds that could be working harder, a SSAS loanback could be a game-changer.
Used correctly, it gives you:
- More financial control
- Faster business growth
- A growing pension pot
- No reliance on banks or high-interest lending
Ready to unlock your pension’s full potential?
At GoldHouse, we specialise in SSAS pension strategies, including loanbacks, commercial property purchases and smart acquisition models. We help you protect your future, grow your business and build a lasting legacy for your family. Contact us today.
