Banking and Property Finance

Lending to Pension Funds

Lending money to and taking security from pension funds can often be tricky for both the lender and the pension trustees. It is essential that both parties have expert legal advice to ensure that the deal complies with the pension trust deed and HMRC requirements and that the trustees have no personal liability.

Our team has detailed knowledge and understanding of how pension funds can acquire, hold and dispose of land and property. We regularly advise relationship managers on what is possible when lending to a SIPP or SSAS and how best to structure the deal.


Examples of our recent work in this area include:

  • Drafting bespoke facility agreements for two loans (repayment and interest-only) to a SIPP to acquire a commercial property. We completed a legal charge and oversaw completion of an occupational lease to the pension member’s company, ensuring compliance with the pension scheme and HMRC rules
  • Acting for the bank taking security over a property owned 50% by a company and 50% by two separate SIPPs. We gave detailed advice to the Bank around the correct security structure (given that a pension fund cannot grant security in respect of a third party’s liabilities) and the need for three separate legal charges and side letters to govern the bank’s rights in an enforcement situation