Buying a property using pension policies

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Privinv

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Hi

I am considering using my pension policies to purchase a property (I dont like the current volatility of the pension funds). I would appreciate information/ advice on how to go about this.

Many thanks.
 
i may be wrong but i was always under the impression that pension policies couldn't be used as colateral for a loan, or do you mean to cash in your policy and use the funds to purchase property
 
Depending on your circumstances and the types of pension policies you own, you can set up either a Self Administered pension fund or a Self Directed pension policy, transfer the value of your existing pension policies into it, arrange borrowing by it if necessary and direct it to buy a property of your choosing.

There are many aspects to consider, however. Here's just a small sample:_

(1) Why do you think that an investment in property will be less volatile than your current pension funds?

(2) Your current pension funds may or may not be well diversified; using these monies to buy one property is not diversified at all.

(3) Transfers between certain types of pension policies are difficult if not impossible. You'll need to establish if your current pension funds can be amalgamated.

This is a complex area and requires professional advice, in my opinion.

Liam D. Ferguson
www.ferga.com
 
Thanks Liam

"transfer the value of your existing pension policies into it, arrange borrowing by it if necessary and direct it to buy a property of your choosing."

Yes, this is what I am proposing. is it difficult to do and what are the typical set up costs? Who should I talk to get more information?

I appreciate the other points you made.
 
If you have established that the type of pension policies you already have can be transferred (see note 3 above) and that it is what you want to do, it's not a difficult process. There's paperwork involved with setting up your new arrangement. Then a bit more paperwork involved in getting the transfers from your existing policies arranged. Your broker should hold your hand through the paperwork anyway.

Any good pension broker should be able to set up a self-directed pension for you, as Standard Life and Irish Life offer such arrangements and most brokers will have agencies with them. If you want a fully self-administered arrangement, you'll need a pensioneer trustee.
 
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