Is there such a loan available?

Carla6919

I quit my job to travel 4 years ago but it looks like my funds wont last until I get my pension in 2 years time.  My pension is in a SIPP and is worth approx £1million. I need around £20,000 to see me through the next two years.  Obviously I will easily be able to pay off a loan once I get my pension.

Does anyone know if there is a way of borrowing money with no payments or interest only payments for two years?  I have no assets to secure against and no regular income.  Obviously returning to work is a last resort if I am unable to get a loan.  Any other suggestions also welcome.

MrFrugalFever

With no regular income I’d be surprised if you manage to get any credit at all, let alone £20,000.

Have you looked in to withdrawing lump sum from pension (some is tax free) in the interim?

Carla6919

MrFrugalFever said:

With no regular income I’d be surprised if you manage to get any credit at all, let alone £20,000.

Have you looked in to withdrawing lump sum from pension (some is tax free) in the interim?

I'm let to believe any pension I take will be taxed at 55% before I'm 55.

Brie

If you don't need a lot - and £20k over 2 years isn't really a lot - is there any reason you couldn't get a part time job?  Nothing to strenuous, a couple of days a week maybe?  Doing something you like/are good at?  I'm a bit too young to retire (well in my mind only) so am starting a job just above min wage for 10 hours a week.  Pays a fraction of what I was paid before redundancy but it will keep my brain and me ticking along.

Carla6919

Brie said:

If you don't need a lot - and £20k over 2 years isn't really a lot - is there any reason you couldn't get a part time job?  Nothing to strenuous, a couple of days a week maybe?  Doing something you like/are good at?  I'm a bit too young to retire (well in my mind only) so am starting a job just above min wage for 10 hours a week.  Pays a fraction of what I was paid before redundancy but it will keep my brain and me ticking along.

That is my last resort.  As things are I travel a lot and never have the time to become bored or idle.  I'm enjoying it so much I want to continue as long as possible.  Dare I say that I'm a little concerned that maybe my health could deteriorate and not allow me to when I have my pension and way more money than I need.

sourcrates

You cannot take your pension before age 55, unless there are very limited extenuating circumstances.

DE_612183

There are companies that do this - however I think you need to work out how much you borrow - they will not be interest free or payment free - but for example you could borrow 30K and use 10k to service the loan for two years.

Google is your friend here when looking for companies - I was looking at this a few years ago, but in the end didn't do it - but it can be done.

sourcrates

DE_612183 said:

There are companies that do this - however I think you need to work out how much you borrow - they will not be interest free or payment free - but for example you could borrow 30K and use 10k to service the loan for two years.

Google is your friend here when looking for companies - I was looking at this a few years ago, but in the end didn't do it - but it can be done.

See here - 

Tempted to cash a pension before 55? You are at serious risk of fraud | This is Money

DE_612183

sourcrates said:

DE_612183 said:

There are companies that do this - however I think you need to work out how much you borrow - they will not be interest free or payment free - but for example you could borrow 30K and use 10k to service the loan for two years.

Google is your friend here when looking for companies - I was looking at this a few years ago, but in the end didn't do it - but it can be done.

See here - 

Tempted to cash a pension before 55? You are at serious risk of fraud | This is Money

Transferring the pot is different to getting a loan.

Carla6919

I'm not looking to take from or move my pension.  I suppose my thoughts were really to see if I could use it for security in any way to get and advance type loan.

pmartin86

I think as others have said, without any income a loan is likely to be extremely hard to get - the only thing that might be suitable is some sort of equity release, but that's likely to cost your an absolute fortune and I'm not sure if you can "pay them back" so to speak.

I know you want to avoid work if you can, but to have a million in a pension pot and being able to "retire" at 49 (?) suggests you were in a decent job - do you still have relevant skills? Could you do some freelance contracting/consultancy? you'd be able to work in small batches then to top you up between your travels.