Can you borrow money against your pension in the UK? Not from the pension itself: a scheme loan to a member is taxed as an unauthorised payment.
The question can mean three things: cash now, a loan from the pot itself, or an ordinary personal loan while you draw a pension. The answers differ, so this page takes them in turn. Before any of them, there is a free option: MoneyHelper runs Pension Wise appointments on defined contribution pensions, impartial and government-backed, and one of the topics is how to spot and avoid scams (Pension Wise page, snapshot 28 September 2026). Pots, debts and tax can interlock in ways no general guide untangles, so a specialist's eye helps: your name and a number, supplied through the form on this page, lead to a complimentary ring from an adviser firm that holds FCA authorisation.
What the tax rules say about lending from, or pledging, a pension
The Finance Act 2004 (section 160) says the only payments a registered pension scheme may make to a member, or former member, are those listed in section 164. That list covers pensions, lump sums, recognised transfers, scheme administration payments, pension sharing payments and a few others. A loan to the member is not on it, and section 171 rules out treating one as a scheme administration payment. HMRC's Pensions Tax Manual states the result: a scheme may lend to third parties, but a loan to a member or anyone connected with one is taxed as an unauthorised payment (PTM123100).
Using the pension as security meets a second barrier. Section 172 deals with a member who assigns, or agrees to assign, pension benefits or rights: unless that is under a pension sharing order or provision, the scheme is treated as making an unauthorised payment to the member. For occupational schemes the Pensions Act 1995 (section 91) adds that an entitlement or right to a pension "cannot be charged or a lien exercised in respect of it", and that an agreement to do so is unenforceable. Its exceptions are listed in subsection (5): among them, commutation on or after retirement or in serious ill health, and a charge in favour of the employer or the scheme itself to recover money lost through the member's criminal, negligent or fraudulent act, or paid in error. An outside lender is not among them.
Sections 182 to 185, which people sometimes cite, are about something else. Section 160 describes them as provision about amounts that a registered pension scheme is not authorised to borrow: the scheme's own borrowing, not a member's.
What follows if a scheme lends to a member
Because the loan sits outside the authorised list, the whole amount is an unauthorised payment. HMRC's manual says a loan to a member, or to a person or company connected with the member, "will result in an unauthorised payment equal to the amount of the loan", and that the scheme administrator also faces a scheme sanction charge (PTM123300). GOV.UK sets tax on unauthorised payments at up to 55%. How the three charges are built, and who pays each, is in pension early withdrawal penalties.
Loans to the sponsoring employer: the lending the rules do allow
An occupational scheme, including the small self-administered schemes covered in SSAS providers, can make a loan to a sponsoring employer that counts as an authorised payment, subject to DWP legislation (PTM123100) and to the conditions in section 179 of the Finance Act 2004. There are three. The amount must not exceed 50% of the scheme's cash plus the market value of its assets immediately before the loan; the loan must be "secured by a charge which is of adequate value"; and the repayment terms must comply, which means interest at no less than a prescribed rate, repayment within five years (the date can be postponed once) and a minimum repayment in each loan year. HMRC breaks these into five tests (security, interest rate, term, maximum amount and repayment terms), and a loan that fails one or more gives rise to an unauthorised payment (PTM123200). None of this reaches a director personally: a loan to a member, or to a person or company connected with one, is the unauthorised payment described above.
Offers of a "pension loan": what the regulators say
Given the rules above, an advert for borrowing from your own pension pot deserves suspicion. The FCA notes that offers of early access tend to be dressed up as a "pension loan" or "pension liberation", the pitch being that you can borrow from your own fund, and its advice for an approach out of the blue is to hang up on a cold call, never take advice from the company that contacted you, and use only an adviser it has authorised. The Pensions Regulator puts the word "loan" on its list of scam warning signs. What such a "loan" really costs is fees and tax rather than interest, and the early withdrawal penalties guide sets out the charges; the minimum age rules sit in taking a pension at 55.
Scam warning signs are also on the agenda of a Pension Wise session (what Pension Wise is). If money is tight and the pension looks like the obvious place to turn, one route to a view across every pot and debt at once is a phone conversation with an adviser who holds FCA authorisation, and the form on this page, a no-cost step, sends that request.
Ordinary borrowing when you have a pension
A personal loan is a contract with a lender, not with your pension scheme, and nothing in your pension secures it. FCA rules require a firm to make a reasonable assessment of creditworthiness before it enters a regulated credit agreement (CONC 5.2A.4R). How a lender treats pension income or age is up to the lender, so ask it. And when a search for pension loan interest rates turns up a figure, check what is on offer: a personal loan from a lender is one thing, a loan from a scheme to you is an unauthorised payment.
For clearing a debt, MoneyHelper says money held in a pension usually cannot be claimed by anyone you owe money to, but money you take out might be (MoneyHelper, Taking your whole pension in one go, snapshot 11 February 2026). The regulator's scams page, linked above, says to contact a free debt adviser first, and MoneyHelper's debt advice locator finds one (snapshot 13 October 2026).
Taking your own money out is a different matter from borrowing. HMRC puts the normal minimum pension age at 55 until 6 April 2028, when it becomes 57. The routes are in cashing in a pension, the tax-free lump sum and drawdown; whatever stays invested can drop in value as well as grow, so the sum eventually drawn may be smaller than the contributions behind it. Earlier access on health grounds is in ill health retirement. Releasing money from a home is a separate product, covered in equity release, and the mortgage question is in pension or pay off the mortgage.
Questions about borrowing against a pension
Can I get a personal loan if I have a pension?
A personal loan is arranged with a lender, not your scheme. Whether you are accepted, and on what terms, is the lender's decision after its checks.
Is there a pension loan interest rate to compare?
A loan from a registered scheme to a member is an unauthorised payment, so a rate quoted for one is a reason to check who is offering it. Rates on ordinary personal loans are set by each lender and move, so use the lender's own quote.
Can I use my pension as security?
Occupational pension rights cannot be charged under the Pensions Act 1995, apart from the cases the Act lists, none of which is a commercial lender. Under the Finance Act 2004, assigning or agreeing to assign benefits is treated as an unauthorised payment unless it is under a pension sharing order or provision.
Can my SSAS lend me money?
No. It can lend to the sponsoring employer if section 179 is met, but a loan to a member or someone connected with one is an unauthorised payment.
Your next step
Write down what the money is for, how soon it is needed and which pensions you hold. Pension Wise is free, and so is the debt advice MoneyHelper's locator points to. Circumstances specific to you suit an adviser who holds FCA authorisation, and the form on this page, completed with brief details, begins the process without cost.