Investments

Borrowing

Your SIPP can borrow funds for such purposes as property purchase and/or development, funding other investments, payment of benefits, or to fund the payment of a pension sharing order on divorce. The following conditions apply to all borrowing:

  • The maximum amount that can be borrowed is 50% of the net fund value of the scheme. When calculating this limit, all existing borrowing must be taken into account.
  • The borrowing will usually be from a bank. However, the scheme can borrow from any party, including those connected to the scheme. Whoever is used, the borrowing must be made on commercial terms.
  • There is no specific requirement for the loan to be secured. However, most lenders would require security under their normal commercial terms. This would mean that borrowing from connected parties would also need to be secured.

Borrowing which was taken out before 6 April 2006 will not be re-tested against the above conditions after that date. However they will be taken into account should you wish to borrow further amounts.