Member Benefits

The main purpose of any registered pension scheme is to provide its members with an income to support them later in life. The act of taking pension benefits from a pension scheme is known as benefit crystallisation.

A member may take their benefits from a SSAS at any time between the ages of 50 (age 55 from 6 April 2010) and 75. All of the member’s benefits must be crystallised by their 75th Birthday. There is no requirement for the member to stop work or ‘retire’ when they crystallise their benefits.

A member of a SSAS is entitled to the following benefits:

  • A one-off tax-free lump sum known as the pension commencement lump sum which is paid at the date of crystallisation, and
  • A pension for life, which is taxed as earned income.

A member does not have to crystallise their whole fund in one go. They can take their benefits in stages (before age 75), crystallising part of their SSAS and leaving the rest for the future. This is known as phased crystallisation.

At the time of crystallisation, the member's total pension funds are tested against the lifetime allowance. If the lifetime allowance is exceeded, then a tax charge will be applied to the excess (unless the member has the necessary protection).

It is important to note that the death benefits payable in respect of a member are different depending upon whether or not the member had crystallised their benefits and whether or not they were over the age 75 at the time of their death.