Unsecured Loans - Utilising private pension
Rates from 10% – bad credit accepted - 3 to 30 year term – no maximum limit
Borrowers must have a frozen transferrable pension
Important - Each loan must have life insuarance.
If you dont offer it the lender will, please advise your client accordingly.
Qualifying pensions must be frozen - no employer contributions.
Ideal for deposit, remortgage shortfall or business finance
Unsecured loans from £1,000 upwards
Term available of 3 to 30 years (loan must be repaid by retirement)
Available capital and repayment or interest only
Rates between 10% and 15% dependant on term and loan amount
All levels of adverse credit considered with a satisfactory explanation including
paying off Bankruptcies and IVA’s
Affordability proven by bank statements, payslips, SA302’s, benefits etc
If loan is for business purposes affordability can be based on a 12 month earnings
projection – therefore recent self employed or no accounts considered
If client can’t afford capital and repayments – can consider partial or full roll
up of interest and repayments to be recovered from tax free lump sum at age 55
Loan can be used for any legal purpose whatsoever
England, Wales, Northern Ireland, Scotland including Scottish islands and Channel Islands
Age 18 (if they have a suitable pension) up to age 70 at end of the agreement
CCA regulated agreement with minimal CCA redemptions
2% commission approx
Borrowers must be prepared to switch their pension to the lenders preferred investment
via a SIPP – minimum pension value £20000 (lower amounts considered on merit)
This product is not suitable for small loan amounts unless the borrowers gain additional
benefits from the proposed pension arrangements.
Borrowers must not be drawing pension or have taken the tax free lump sum
If in doubt refer the enquiry to the lender to discuss direct with your client
As part of qualifying for the loan, borrowers will be asked to review their pension
arrangements to provide a vehicle which is acceptable to the lender and will protect
the future value of the pension. The Pension does not have to be frozen.
Whilst the loan is not secured on the pension, the value of the pension fund is relevant -
borrowers can expect to be offered a loan of between 35% and 50% of the pension value (S.T.A), after
deduction of transfer and SIPP set up costs.
If a client already has a SIPP (Self Invested Pension Plan), this can be used to manage
the investment, subject to investment with an approved SIPP provider.
The standard costs applied to each transaction are £3000 (Includes £2500 for setting up
the SIPP and introduction to the I.F.A and £500 admin. All recommendations will be fully
explained to the client so they have the opportunity to review all details before they incur
any cost commitment.
The SIPP is the vehicle set up to manage the investment. The borrower can still use
the SIPP for other investments and this is normally what happens. If the SIPP is also
cancelled then the set up costs would be lost.
If, once the loan completes, the borrower wishes to change the proposed investment
within the SIPP, they can do so subject to a penalty of around £1,000 plus the SIPP
providers money handling fee.
Once you have submitted an enquiry, the lenders agent will contact your client to explain the
product and prequalify your client.
Updates are minimal as we do not process the loan – please liaise with your client if
you wish to check suitability or follow progress