From Special Report: Sipp and Ssas - September 2011
In the shadows
With big marketing budgets behind SIPPs it is inevitable that they overshadow SSASs. But is there still a place in the market for the more niche scheme?
SSASs have long been seen as the niche scheme, far overshadowed by the popularity of SIPPs. While the 80s and 90s was a boom time for SSASs, with providers writing hundreds of new schemes, this has fizzled out to a handful of new schemes today.
However, all providers still argue that the schemes have something to offer above SIPPs and still need to be considered as an option. The presence of a loanback facility means that the scheme can offer a lifeline for businesses struggling in the current climate, when access to credit is still difficult, albeit not as impossible as during the height of the credit crunch.
With big marketing budgets behind SIPP schemes, it is inevitable that they will attract more attention, with many people not considering, or even being aware of, SSASs. This is unlikely to change soon, as the market to which SSAS now appeals has dwindled to a level that it is no longer worth providers putting significant marketing into them, so fewer people have knowledge of them, meaning that it becomes self perpetuating.
That said, a significant number of providers are still in the marketplace, although a tiny percentage of SIPPs, and many are still promoting SSASs. There is still choice in the marketplace, despite warnings of further consolidation, and a wealth of different schemes, charging structures and investment levels are on offer.
There are the same number of providers in the survey as last year, although some are new this year with others falling by the wayside. IPS Partnership, owned by the IFG Group, is no longer listed separately to James Hay, following IFG’s takeover of James Hay in 2010. The two offices were restructured and brought together in March of last year, with their results now being listed together. Premier Pensions is now listed under JLT Premier Pensions, as it forms part of the Jardine Lloyd Thompson group, an employee benefits company.
This year, a number of providers chose not to disclose their business figures, meaning that gauging the size of the market is more difficult. However, the total for those disclosing figures is £12.8bn, averaging £555m per provider. This is an increase on last year, when the same number of providers took part and the total was £12.2bn making an average of £558m per provider. The number of schemes has also increased, in addition to the value, at a greater rate than the value. This year’s Table shows 20,460 schemes in place, averaging 731 per provider, compared to 14,456 last year, which worked out as 578 schemes per provider.
This is either an indication of an increasing number of smaller schemes being set up or likely a sign of the reduction in the value of investments and property held within the SSAS during the past year. A large number of SSASs are set up in order to buy property, meaning that a large portion of scheme assets are invested in them, leading to their value being heavily reliant on the fluctuating property market.