Pension scheme & mortgage/rent deposit

MoonDragon

Hi all,

I have (few) £7000 in my pension scheme (where my previous employer was the only contributor) and I have to transfer it.
Also, I would like to know if there are pension providers that could allow me to use this pension as a deposit for a small mortgage or rental property deposit.

Thanks in advance for your help,

MoonDragon

Aegis

MoonDragon wrote: »

Hi all,

I have (few) £7000 in my pension scheme (where my previous employer was the only contributor) and I have to transfer it.
Also, I would like to know if there are pension providers that could allow me to use this pension as a deposit for a small mortgage or rental property deposit.

Thanks in advance for your help,

MoonDragon

There are no such schemes. Pensions cannot be used to purchase residential property in any way, as this is one of the specifically banned investments for all UK schemes.

MoonDragon

Aegis wrote: »

There are no such schemes. Pensions cannot be used to purchase residential property in any way, as this is one of the specifically banned investments for all UK schemes.

Can pension schemes be use for something else so?

Since I am self-employed (but presently sick), based on the article bellow ( http://www.pensionsadvisoryservice.org.uk/self-employed-and-pensions/private-pensions ) can I transfer my pension scheme to a SIPP :

Self Invested Personal Pension (SIPP)

A SIPP is also a type of personal pension plan. It follows the same basic rules with regards contributions, tax relief and eligibility. The difference is the investment freedom that a member has and the ability to borrow against the fund for further plan investments.
A conventional personal pension generally involves the planholder paying money to an insurance company for investment in an insurance policy. The choice of investments is limited to that offered by the plan provider.
A SIPP allows the plan holder much greater freedom in what to invest in and for the plan to hold these investments directly. The plan holder can have control over the investment strategy or can appoint a fund manager or stockbroker to manage the investments.
The SIPP itself is established under a trust. The trustee controls the investment under instruction from the member. It is possible for the plan holder to be the trustee. If this is the case, an approved administrator must be appointed to carry out investment transactions.
A SIPP can borrow money against the value of the fund for investments that the trustees consider will benefit the scheme (for example, commercial properties). It can borrow, at any time, up to 50% of the scheme's assets.

atush

Yes a sipp could be used to fund commercial property, but not yours as it is far too small.

dunstonh

£7000 is tiny and if you borrowed 50% against a commercial property you would have £10500. Fees for such things are higher and typically monetary rather than percentages. You would lose money hand over fist.

MoonDragon

dunstonh wrote: »

£7000 is tiny and if you borrowed 50% against a commercial property you would have £10500. Fees for such things are higher and typically monetary rather than percentages. You would lose money hand over fist.

Do you mean £3500 instead of £10500?

My goal is the build a 'virtual cash' based on my occupational pension scheme that i cannot cash in goal to have any kind of accomodation (originally I wanted to receive the scheme in cash but my employer told me that it is not possible due to contribute and worked for the company for less than two years (compromise agreement signed)).

mania112

He was adding 50% to your 100% (obviously)

MoonDragon

mania112 wrote: »

He was adding 50% to your 100% (obviously)

Sorry but it maybe my english :

A SIPP can borrow money against the value of the fund for investments that the trustees consider will benefit the scheme (for example, commercial properties). It can borrow, at any time, up to 50% of the scheme's assets.

I think the scheme's own assets (100%) will remain in the scheme.

mania112

Duntsonh was totalling your assets in the SIPP £7,000 in funds and £3,500 in borrowings.

atush

MoonDragon wrote: »

Sorry but it maybe my english :


I think the scheme's own assets (100%) will remain in the scheme.

It may not just be your english, but your maths that is the problem here.

You don't have enough in your pension to do what you want. Are you thinking of putting more in? If not, why not? Are you planning on being poor in retirement?

MoonDragon

Please disregard the mortgage or rent part in my original thread.

I have to transfer my pension scheme before the end of this month :
As a self employed person (owner of a limited company) can I transfer it to a bank scheme (hsbc, etc...)?