Marketing director Mary Stewart says the Sipp specialist firm has seen a resurgence in Ssas due to the loanback facility available for small businesses under SSAS.
She says: “Given the market and what has been happening, a lot of small businesses have had the need for more cash in the business and have found it difficult or very expensive to borrow more money – either the banks won’t lend or they will lend at an astronomical rate.
“We have seen more interest in Ssas recently because of the loanback opportunity. We have even seen some people transferring from Sipp into Ssas and then use the money they have got in their Ssas to do a loanback to the company.”
Stewart says that there is a double benefit in using the SSAS loanback facility because not only is the interest rate on borrowing in this way very low but the interest payments the clients make also go back into their own Ssas and not to a bank.
She also believes that the Budget move to slash tax relief on pension contributions for high-earners will lead to a red- uction in the size of Sipp contributions and says this will hit life offices hardest because they charge a percentage of assets under administration rather than a flat fee.
Informed Choice joint managing director Nick Bamford says: “The switch from Sipp to Ssas has not yet got on to our radar but I can see the logic if you are a small or medium-sized business that needs finance.”