Loan against future Pension payout

cazzie1312

Hi, I’m after some advice on the best way to take out a short term loan (6 months) to help see me through until I get my private pension lump sum and monthly pension. I own my home with no mortgage but currently have no income of my own. We can just about get by on my wife’s salary but would really help to have some extra cash available as have many small projects to do around the house. What would be best way to borrow £6k-£10k? Or is there no easy/overly expensive way.

Emmia

0% credit card for purchases? That would work for everyday spends, but you would need to  ensure you pay the minimum monthly payments required to keep the 0%

Although with no income you might struggle - could your wife apply and have you as an additional card holder? She would be liable for your spends though 

Brie

I was surprised when we were planning a new kitchen thru a national DIY shop that I could apply for an account to front the full cost of the refit.  Refit itself was a bit more than our (seriously low) household income but we were granted credit of twice that. 0% for 4 years with monthly payments to clear the total over that period.  So if this was an option you could make fairly low monthly payments and then pay more once you had more cash coming in, if you wanted.

Grumpy_chap

cazzie1312 said:

Hi, I’m after some advice on the best way to take out a short term loan (6 months) to help see me through until I get my private pension lump sum and monthly pension. I own my home with no mortgage but currently have no income of my own. We can just about get by on my wife’s salary but would really help to have some extra cash available as have many small projects to do around the house. What would be best way to borrow £6k-£10k? Or is there no easy/overly expensive way.

I would assume that a loan against future pension is simply not available.
There are strict rules covering the age at which access to a pension is possible.  If loan products became available against future pension income or lump sum, that would wholly negate the rules about access age.

stuhse

Is getting a job an option ?

cazzie1312

I should add that I will be 60 in 6 months so age is not an issue. Neither is any change to my pension pot which is payable at 60.

Grumpy_chap

If you are already over 55 (obviously if you are 60 in 6 months), are you able to draw from the pension now, or is this an employment-linked pension with protected benefits based around drawing from age 60?

cazzie1312

Yeah can’t access at all until I’m 60. Just got my figures through now and made me wonder if I could get a small loan

Grumpy_chap

Does it have to be you who takes the loan?
The fact is, at the moment, you have no income.  No income is not attractive to lenders.
Could your wife obtain a loan?
It probably makes no difference whether you or your wife obtain the loan given you really sound like a stable couple with fully shared finances.  

macman

No one is going to give you a loan against a potential future pension payout. Consider the worst option: you get the loan and drop dead the next day?
Can you not get a loan against your wife's income (which you haven't stated)?
As suggested above, a 0% CC is probably your best option if her credit history is clean.

sparks_2023

You can't get a loan against your future pension. This would be deemed to be accessing the pension early with terrible and dire punitive tax consequences. Forget tax-free, they'd tax you at 90% ! That's why lenders won't go near this sort of deal. A £10K loan against a pension fund would cost you £9K in tax! That's if you could even get the loan - which is less than doubtful.
No lender will loan against future pension lump sums or income.