Explanation below:
A self administered scheme is one which invests directly in the open market as opposed to holding a pension policy with a life assurance company.
The usual reasons why a company might establish such a scheme as opposed to using a pension contract from a life assurance company are:
If the company wants to use the services of an institutional fund manager but does not want to be tied to the performance of a single fund manager, a self administered scheme allows the fund to be split between several managers or switched from one manager to another without difficulty. The costs associated with a self administered scheme, particularly where contributions are significant, are often lower than with a standard pension contract.
In terms of restrictions on investment , there is a lot of leeway but there is a statutory requirement to notify the scheme members if more than 5% of the fund is invested in the employer's business ( self investment).
There are restrictions however on self investment if the scheme is regarded as a "small" scheme. A Small Self Administered Scheme is one which has fewer than 12 members or where 65% or more of the company is attributable to 20% directors, their spouses or dependents.
Self Admin schemes also allow you to invest in shares and direct property through your pension which is an attraction for alot of people. On the subject of borrowing the recent Finance Bill allowed it which is a major development and currently the banks have indicated that subject to certain criteria (e.g. rental income) they will look at loans to value of between 50% to 75%.