When it Comes to Pensions, will 2017 be the Year of the SSAS?
As specialists in Small Self Administered Pension Schemes (SSAS) for many years, we have been providing expert service and advice for the setting up and running of SSASs. For that reason, we are pleased to report that new SSASs were a growth area over the last 12 months. This article takes a look at some of the reasons why and predicts a good year in 2017.
In 2016 the regulator got tough on scammers
For quite some time, thanks to the low interest rate environment we have lived with since the 2008/09 recession and the associated volatility of the stock market, those with large pots of pension money have been at risk of being ‘scammed’ by unscrupulous pensions sales people, promising them superb returns in schemes that were often entirely fake. In 2016, there is no doubt that the pensions’ regulator started to get tough on the scammers, and that is good news.
It’s also true to say that the introduction of pension freedoms also played a part, as this meant that the scammers could go direct to the pension pot holder, rather than having to go via a pension fund.
Before the introduction of pension freedoms, SSASs were a favourite of the scammers because they were considered to be a “less regulated” product than other pension vehicles. However, when HMRC introduced the “fit and proper” rule for administrators from September 2014, establishing and registering a SSAS became harder to achieve, which in turn made life harder for the scammers.
What Further Action is the Government Taking?
The fight against the scammers continues, and HMRC is now asking for even more information and documents before it will register new SSASs. This is good news for the industry and covers the following areas:
- SSAS administrators will now receive a “notice to provide information and produce documents”, which will be issued after they have made the registration application. This means it will take longer to register a scheme because of the greater scrutiny, which can only be good news in the fight against the scammers.
- The Government is also toughening its stance significantly. One example of this is the consultation paper it issued in December 2016, which seeks views on the possible introduction of a ban on cold-calling and the benefits this might bring.
Along with many other commentators, we believe that a ban on cold calling would be a good thing. We wonder whether the same legislation should apply to emails and texting, however. Time will tell.
The fact HMRC and the FCA are working to improve the situation regarding scamming is positive. Even though it is now taking additional time to set up new SSASs, we have not seen any decline in their popularity as a pensions’ vehicle. Indeed, we expect 2017 to be the year of the SSAS.
Contact us or call us on 0121 693 0690 for help and advice on SSASs.