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Advice on borrowing against a pension pot

I am a 50 year old single dad looking for advice on types of loans available which can be offset against a pension?

Background.  I have 2 v healthy pension pots available to me at 55 where I plan to access the 25% tax free funds and enjoy some of my money when I'm still fit and healthy. Beyond that my plan is to mange the rest of the funds in a drawdown / investment fund. However, at the moment I'm struggling financially and my rainy day savings have long since disappeared down the storm drains! To make it worse, both my teenage sons are looking for short term loans from me to finance cars before they get savings schemes paying out to them - so altho I will be paying out the money I will get it back within  12 to 18 months. Over and above this I am needing some free cash for home improvements and holidays *post COVID, plus I've a small amount of debt to pay off.

My question is. Are there any products on the market where I can borrow small amounts against my large pension pot as equity, but where I can delay pay back until closer to my pension  release date at 55, ie pay back the full amount plus interest at 55?

If not, does anyone have any advice how I could release equity against my pension fund now - without having expensive monthly loans payments straight away?
Thanks
Confused....
«1

Comments

  • Thanks both. Zx81 - you are not my mum are you?? :D
  • DCFC79
    DCFC79 Posts: 40,614 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Im sure your 2 sons are old enough to save up for a car, look at something less expensive or make the the current one last.
  • Your pension pots cannot be used as security for a loan - period.
    If your credit files do not allow you to borrow on a repayment basis now then what DCFC79 has told you is spot on.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    I agree with everything zx81 said.

    I can't believe you are amenable to getting into more debt than you already have so you can buy cars for your sons. There's a lockdown in place right now, they shouldn't be going anywhere. Unless their work is essential. Don't they have push bikes? 

    No, I'm not your mum either.
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • Fighter1986
    Fighter1986 Posts: 834 Forumite
    500 Posts Third Anniversary Name Dropper
    edited 12 January 2021 am31 5:21AM
    It's amazing you know, I've always managed to buy my own car... Except for when I couldn't afford one.

    Then I didn't have one. 

    I survived. 
  • shinytop
    shinytop Posts: 2,131 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    https://www.ftadviser.com/pensions/2020/06/09/how-to-borrow-from-one-s-pension/
    A non-judgemental explanation of what's allowed and what isn't in this area.  
  • Herzlos
    Herzlos Posts: 15,404 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    There's almost no use in having a car at the moment unless they need to get to work, and with investments maturing in 12 months they'd be best just buying something that'll do them until then or potentially withdraw the savings early and take the hit.

    Got much to sell? You can have a clear out and generate some cash at the same time, albeit probably not enough to buy 2 cars with.
  • macman
    macman Posts: 53,128 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You are expecting a loan against your pension pot without paying any 'expensive interest' in the meantime? Despite that pension not being available to you for another 5 years?
    How do you imagine that anyone lending to you on that basis is going to remain solvent?


    No free lunch, and no free laptop ;)
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