What Is a Property Pension Fund and How Can It Help My Business?

What Is a Property Pension Fund and How Can It Help My Business?

In the modern business world, where every industry has been revolutionised and is more competitive than ever, it’s increasingly important for business owners to find new ways to improve their company. For businesses looking to expand or purchase new premises, property pension funds provide a useful solution.

While we live in a digital age where many businesses operate online and have no physical premises, there are still many industries that require space for commerce, storage or specific services they provide. While this is a manageable feat for companies with the funds to rent or even purchase property, for others it can prove challenging.

In this article, we take a look at the various short and long-term benefits of a property pension fund, and why it can be a valuable asset for your business.

What Is a Property Pension Fund?

There are two types of property pension fund: SIPP and SSAS pensions, with the latter being the most beneficial option for business owners. SSAS pensions are designed for anyone in need of a pension that supports their company, as it allows them to move their funds between the company and their pension while attracting corporation tax relief.

Rather than attempting to raise the funds via a bank loan, you can authorise a pension provider to transfer historic contributions from your company’s SSAS pension to the company bank account (and vice versa). It’s also worth noting that previous pensions from former employers can be added to a new SSAS pension to support your business.

What Are the Benefits of a SSAS Pension?

A SSAS pension is much more than just a financial resource: it can be a vital business tool. The short-term benefit is that you have the peace of mind knowing there are additional funds available for your company when you need them. In the long term, you’ll have a larger retirement fund as a direct result of your business’s success. SSAS pensions also have the same advantages as a SIPP (self-invested personal pension) and personal pensions, but you can benefit from additional investment opportunities.

For example, the director of a company may use anywhere up to 50% of the money in their pension fund as an investment in their own business. Several business owners also choose to transfer their business premises into the SSAS pension, as it means that company rental payments can then be paid into their pension scheme.

The Positive Impact on Your Business

As we said above, not every business today requires property, but for those that do, having bigger or better premises can substantially improve its potential. For example, if a company is limited in any way because of the size of its property — whether that’s the number of employees you can hire or the number of products you can store — it instantly impacts your ability to conduct business and make more money.

While the quality of your products or services is what defines you as a business, there’s a lot to be said for the importance of branding, and this includes the space your company calls home. If your company has clean-cut and modern branding but resides in a dingy, run-down property, it’s difficult to portray the former to your customers or clients.

Upgrading your premises can also ensure the safety of your employees and any products you store on site. This is especially vital for businesses that rent or own warehouses, which naturally have a wider range of hazards and safety regulations you must adhere to.