25% Tax Free Pension Cash at age 55

lawriejones1

Can you not get a credit card, get a cash advance then transfer the balance to a 0% credit card? I did that (smaller amount, same principle...)

lctcb

dzug1 wrote: »

Given that that cash sum is PART OF YOUR PENSION you do appear to be trying to get a loan against it

Just trying to see if this guaranteed future payment can be used as collateral.......

lctcb

lawriejones1 wrote: »

Can you not get a credit card, get a cash advance then transfer the balance to a 0% credit card? I did that (smaller amount, same principle...)

Unforunately thats not a route I can do down but thanks for the suggestion.

SippTechie

If the loan is physically secured on the right to the lump sum, I'd argue that this applies

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm07103030.htm

If you can persuade a bank that you have this right, and say that you will use the lump sum to repay the loan, but not actually document the loan as being secured on the lump sum, you may be alright but a) I'm not sure you'd find a lender who would go for this, and b) you'd probably want to double check with HMRC first.

System

You can borrow money from anyone who will lend it to you on the strength of your expectations of receiving money. AFAIK you can't actually legally secure a loan against a a legacy in a will pending completion of probate, but solicitors commonly do this, and I believe banks will too if you are in good standing with appropriate collateral.
People commonly borrow money against the certain expectation of a house sale, ie a bridging loan.

Some loans involve a legal charge, others are unsecured. The rule with pension expectations appears to be an absolute one debaring a legal charge. But are unsecured loans illegal?

bigadaj

Well the lump sum from a pension is considered as security against an interest only mortgage so in theory so no bar one would have thought.

lctcb

bigadaj wrote: »

Well the lump sum from a pension is considered as security against an interest only mortgage so in theory so no bar one would have thought.

Do you know how the lump sum is used as collateral? What I mean is how do the lender guarantee they will get paid from the lump sum?

Thanks

GhIFA

bigadaj wrote: »

Well the lump sum from a pension is considered as security against an interest only mortgage so in theory so no bar one would have thought.

Yes, but a mortgage isn't governed by pension legislation which stops it being accessed before age 55, and a failure to repay allows the lender to repossess the property, so it's not a meaningful comparison.

lctcb

GhIFA wrote: »

Yes, but a mortgage isn't governed by pension legislation which stops it being accessed before age 55, and a failure to repay allows the lender to repossess the property, so it's not a meaningful comparison.

Is it your view that an upcoming tax free pension payment cannot be used as collateral for short term borrowing?

GhIFA

lctcb wrote: »

Is it your view that an upcoming tax free pension payment cannot be used as collateral for short term borrowing?

In my view, it cannot be done.