Multi-Member SSAS Fund Pooling: A Worked Example

Multi-Member SSAS Fund Pooling: Making Large Purchases Possible

One of the most powerful but least understood features of a Small Self-Administered Scheme is the ability for members to pool their individual sub-funds for a joint investment. Unlike a personal pension, where each individual's money is entirely separate, a SSAS can aggregate the resources of all its members — making commercial property acquisitions possible that would be out of reach for any single member acting alone.

This article walks through a realistic example involving four SSAS members who pooled their sub-funds to purchase a mixed commercial property valued at £650,000.

The Members and Their Sub-Funds

Our example involves a company with four director-shareholders, all members of the same SSAS. Their individual sub-fund values at the time of the transaction were:

• Member A (CEO, age 58): £210,000
• Member B (Finance Director, age 52): £145,000
• Member C (Operations Director, age 49): £98,000
• Member D (Sales Director, age 45): £67,000

Total scheme assets: £520,000

None of the members had sufficient sub-fund value individually to fund the equity contribution on a £650,000 property (which would require £325,000 at 50% LTV). But together, with the maximum £325,000 mortgage, the scheme could afford it — just.

"Pooling is one of the genuine structural advantages of an SSAS over individual SIPPs. Four members with modest individual funds can collectively access institutional-quality commercial property that delivers much stronger risk-adjusted returns than any of them could achieve alone." — Matt Lenzie

Governance: How Sub-Fund Contributions Are Allocated

Before any approach to a lender or property, the trustees need to agree on how each member's sub-fund will contribute to the purchase and, critically, how the economic interest in the property will be allocated.

This is a governance decision that must be documented in a trustees' resolution and reflected in the scheme's accounting. In our example, the trustees agree to allocate the property interest proportionally to each member's sub-fund contribution to the equity:

• Total equity required: £325,000 (plus £28,000 in acquisition costs = £353,000)
• Member A contributes: £148,000 (41.9%)
• Member B contributes: £102,000 (28.9%)
• Member C contributes: £68,000 (19.3%)
• Member D contributes: £35,000 (9.9%)

These proportions determine each member's entitlement to future rental income and any capital gain on the property.

The Property and the Deal

The trustees identify a parade of three commercial units on the edge of a town centre: a convenience store (let to a national operator), a dental surgery (let to a long-established local practice), and a vacant unit. Total purchase price: £650,000.

The existing tenants provide immediate rental income:

• Convenience store: £24,000 per year (10-year lease, 5 years remaining)
• Dental surgery: £18,000 per year (15-year lease, 8 years remaining)
• Vacant unit: currently nil, estimated market rent £14,000 per year

Current passing rent: £42,000 per year. Estimated full rental value: £56,000 per year.

Lender Criteria and Mortgage Terms

The trustees apply for a £325,000 SSAS commercial mortgage. Lender criteria for a multi-tenanted property:

• Interest coverage on passing rent: £42,000 / £21,125 interest = 1.99x (acceptable, typically requires 1.5x minimum)
• Vacant unit risk: Lender stresses the income on the assumption the vacant unit remains unlet for 12 months — coverage still passes
• Scheme assets post-purchase: £520,000 – £353,000 = £167,000 (above lender's minimum requirement of £130,000)
• Lease quality: National covenant on the convenience store provides strong comfort

Offer received: £325,000 at 6.5% interest-only over 12 years.

Completion and Post-Purchase Rental Income Allocation

After completion, rental income is collected centrally by the SSAS and allocated to members' sub-funds in line with their ownership proportions. Using the passing rent of £42,000:

• Member A (41.9%): £17,598 per year
• Member B (28.9%): £12,138 per year
• Member C (19.3%): £8,106 per year
• Member D (9.9%): £4,158 per year

After the mortgage interest of £21,125 is allocated proportionally and deducted, each member receives net income that compounds within their sub-fund tax-free.

Letting the Vacant Unit

Six months after purchase, the trustees successfully let the vacant unit to a local accountancy firm on a 10-year FRI lease at £13,500 per year. This brings total passing rent to £55,500 and improves the interest coverage ratio to 2.63x. The scheme's commercial property income is now diversified across three unconnected tenants.

What Happens When Members Have Different Timelines?

Member A is 58 at the time of purchase and may want to start drawing pension benefits within the next 7-10 years. The younger members have much longer investment horizons. This is a key governance consideration in multi-member property pooling.

Options when a member approaches benefit age:

• The other members can buy out the departing member's share at fair market value
• The property can be sold with proceeds allocated proportionally
• The departing member can take income drawdown from their share of rental income, without needing to crystallise the capital
• A partial sale (of one of the three units) can provide liquidity for the departing member without disrupting the whole scheme

This illustrates why a multi-tenanted property is often preferable for multi-member SSAS schemes — it provides more options for managing different member timelines. For more on planning for benefit crystallisation, see our article on SSAS property exit strategies.

Comparing Pooled Investment to Individual SIPPs

If each of these four individuals had their money in a separate SIPP, none of them could have accessed a commercial property of this quality. The pooling mechanism is unique to the SSAS structure and represents a genuine competitive advantage.

For a full comparison of the structures, read our guide on SSAS property finance. To understand how individual sub-funds work in practice, our article on first-time SSAS property purchases is a useful starting point.

Key Takeaways

• SSAS members can pool sub-funds to jointly acquire commercial property
• Ownership proportions should reflect each member's equity contribution
• Multi-tenanted properties provide income diversification and exit flexibility
• Different member ages require careful planning for benefit crystallisation timing
• Pooling allows access to institutional-quality property unavailable to individual SIPP holders

Talk to Us About Pooling

If you have multiple SSAS members and are considering a joint property purchase, the governance and structuring decisions made before any approach to a lender will determine the success of the arrangement. Our team specialises in exactly this type of transaction. You can also view our lender panel to understand which providers are comfortable with multi-member pooled transactions.