Using 'old' pension funds to raise capital

Businesses struggling to raise finance often overlook a neat trick of raising capital using their own forgotten pensions. Julie Wilson of PenLife Associates explains why its worth thinking about.

Julie Wilson

Julie Wilson

Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world. You know the problem with jokes about bankers? Bankers don’t think they’re funny and the rest of us don’t think they’re jokes.

What’s not funny is the fact they small businesses are struggling to expand against the backdrop of virtually zero lending from the banks. As always, it will be businesses in the private sector that lead us out of recession. Just when that will be we may never know. The Office of National Statistics gets the numbers wrong so often it's getting more difficult to predict the past than the future. I vote we stick with the OND’s latest guess that "we’re technically out of recession" 'cos it makes everyone feel better.

Businesses struggling to raise finance often overlook a neat trick of raising capital using their own old forgotten pensions. In the back of the drawer, many of us have a paid up Pru or Pearl pension, or an old employer scheme from when we worked at Marks & Sparks a few years back. They might be worth a few quid but we don’t really care 'cos we can’t get hold of the cash anyway. Well, it's worth thinking again. You can use funds from pensions to buy property, to expand your company, (or release money from property you already own), or in some circumstances, even to make a loan to your company to fuel your expansion plans.  

We've arranged deals where several directors pool their pensions from the various hotch potch most of us have, to either buy a property for the business to work from, rather than renting. Or in some cases to buy the existing property for the pension fund, thus freeing up valuable resources for the business. Sometimes the pensions are used to fund a buy out of a retiring director. The possibilities are endless. Even if you don’t plan on using your pension for your company expansion, it’s worth taking a look at how it’s invested to get a better pension for you!

It’s worth ferreting out any old pensions you have and exploring how to get the best out of them. Call us for an informal chat – at our expense - to find out more.

Julie Wilson – is a straight talking Yorkshire Chartered Financial Planner & Director of York based PenLife Associates Ltd, who help individuals and small businesses increase their wealth and protect it from greedy bankers, crazy Governments, grasping authorities and other legalised robbers. Telephone: 01904 819789 or visit