Pension Lending

This is a type of Commercial Investment Mortgage where the borrowing entity is a Pension Fund.

Pensions can be a SIPP (self-invested personal pension) or a SASS (small self-administered scheme).

Much of the information contained with Commercial Property Investment remains valid when it comes to Pension Lending but there are also so regulatory additions to consider:

  • Pensions cannot own Residential Properties or Semi-Commercial Properties
  • The loan amount cannot exceed 50% of the value of the total Pension fund

Property loan to value cannot exceed 70%

In most cases, the Investment Property is usually linked to the key person.  Perhaps it is the premises where their business trades from, rather than a complete 3rd party transaction.

As part of arranging a Pension loan, clients usually include their own Financial Adviser and a Pension Trustee Company who we would work with to ensure the structure is correct.

Only a few banks are able to support this type of transaction.

Due to the Pension restrictions, loan to value is typically very low (under 50%), which means pricing can be low as a result, although this does vary.  Interest rates are available in the range of 2.5-5.5% per annum.  Arrangement fees are in the range of 1.5-2% of the loan amount which can be added to the facility.

Completion Example

Some examples

Case Studies

Construction Client

Specialist construction client purchasing a used Piling Rig. Purchase Price £190,000 plus VAT.HP loan amount £190,000. VAT Only Deposit. 60 monthly repayments. No balloon.Facility completed


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