www.iva.co.uk

Hi everyone, not been here a while. What are the thoughts of pension loans. There seems to be a lot of introducer's online who state that one can borrow upto 50% of their pension as long as the pension is not being paid into.

I have two old schemes one of which if I could do the above would seriously help to clear our debts.

Mike

I haven't heard of these Mike but personally I wouldn't want to touch my pension pot to clear debts early, I think old age is going to be tough enough for many of us when we get there and will need our pensions if we have them!

Hi Mike, nice to see you and hope you are well.

Personally I wouldn't touch these companies - you will be the loser in the long run unless of course you are not relying on these pensions when you are due to retire.

I appreciate it would not be idea to use these pensions but on the other hand it would give us some breathing space and some life back but it is something I was just looking into. Personally I don't think it can be done which then beggers the reason why so many are available online. I will keep you all posted with what I find out.

Mikey

It may give you some breathing space but you have to look to the long term as well as regards retirement.

Hi Mikey, I was looking into such an idea for someone I know. What I found out was that you are liable for tax if you 'cash in' more that 25% of your pension pot, bottom line is that companies that do this for you seem to forget this little snippet of information. I read quite a few scenarios on the www and they all ended with the pot being bare and the pension holder being the one to pay back HMRC. The pension relief companies are often registered off shore so HMRC, trading standards etc have little to no jurisdiction in applying fines or any degree of administration.

Thanks Merlin

That seems to be pretty much the same result my research shows.

Mike

From what I gather you authorise the firm to cash in the whole of your pensiuon. They then "lend" you the agreed 25 - 50% (leaving you with the tax liability) and then re-invest the remaining pot on your behalf. Naturally, they then get the managing agents g=fees and cuts, which often leaves little of the original pot available for the purpose for which it was intended.

Don't think I'd touch these sort of firms with a ten foot barge pole!!

My thoughts exactly - I think i will save my time looking into it, as always there will always be someone on the make.

Thanks everyone.

Mike

If it sounds to good to be true then it probably is.

Seek advice from a qualified financial planner before doing anything with pension pots.

Paul

Pensions should only really be dabbled with upon the advice of a good Independent Financial Advisor. What seems like a good quick fix now, could really hamper your earning potential in years to come - when that money is probably most needed.

Completely agree with Mel - only touch your pension pot if you have sought sound financial advice - you never know in this day and age what is going to happen and in my opinion what you can save now and not touch will help you later on it life !

Agree that you should speak to a financial advisor before doing anything like this.