PFRDA

How do i raise capital from my private pension fund?

I previously asked a question but ommitted to mention this is a private personal pension ( i am self employed). I am looking to buy a property as an investment through renting it out. I have a sizeable pension fund and hoped there was a method of borrowing on the strength of this.

Public Comments

1. Assuming you have control over the fund investments (eg. as a SIPP), the pension management company may allow you to use the fund to invest in Commercial property = this could include a Hostal, Hotel or (I guess) even a Bed & Breakfast but not a simple residential property (that option was removed by Gorden Brown as soon as he realised what effect that would have on the Capital Gains Tax reciepts from the buy-to-let market). If you can find an allowed property, the fund can borrow an amount equal to 50% of the fund value (all Rents etc. have to be paid into the fund). See link for a discussion of Commercial Property investment. As an alternative you may be able to use the 25% lump sum (assuming it's going to be large enough) as a means of 'guaranteeing' the repayment of an Interest Only Mortgage.
2. Have a look at: http://www.pensionsadvisoryservice.org.uk/specialist_pension_arrangements/sipp/ There is also a free Helpline/e-mail facility to ask questions of TPAS (a grant-aided independent body which won't try to sell you anything).