Last week,  has entered into a partnership with SIPPClub, making pension-based lending via the P2P lending platform much easier. 

Through this partnership with SIPPClub, personal pension owners may . There are some very attractive tax benefits available to pension funds that are invested in P2P loans but due to changes in the rules earlier this year designed to make Self-invested Personal Pensions (SIPPS) much more of a ‘retail product’ SIPP providers are now required to hold higher levels of capital adequacy when they allow their customers to make non-traditional investments. This has made it very difficult to find a SIPP provider prepared to allow P2P. 

This change has made P2P lending more accessible for these small self-administered schemes. The new Partnership with SIPPclub makes it easier for investors to find a SIPP provider prepared to allow investments in P2P lending. Using a SIPP is tax efficient, attracting tax credits and allowing users to earn tax-free interest.”
Additionally, using a SIPP is tax efficient, allowing users to earn tax-free interest. 

When speaking with , Managing Director of ThinCats, he explained that “As with all personal pension fund investments there are generous tax incentives but in the current economic climate most investments struggle to beet inflation. ThinCats loans are producing average interest of over 9% after all costs but before income tax so the fact that pension funds do not pay income tax makes the returns especially attractive.” 

The accompanying changes to the pension rules made it possible to decide to draw down an income from a pension fund rather than purchase annuity. Kevin said “The income from ThinCats loans is typically about 3 times that available from more traditional investments and that means a pension fund of £100,000 could provide a stable and predictable annual income of about £9k a year compared with perhaps £4k a year from traditional investments that also suffer from market volatility.”

In addition to the benefits felt by these new investors, the introduction of pension-based funds translates into greater opportunity for the businesses on ThinCats. Kevin had this to say; “It's going to increase the total funds available to lend on our platform and so mean that more businesses will raise the funds they need.” Three and a half years after launching the ThinCats platform ThinCats has already executed almost £70m of loans to UK SMEs. But an increased flow of personal pension funds will surely have a positive impact on the number of business able to access funding”


ThinCats has created a , which is certainly worth a read if you are considering use of your SIPP via alternative funding. 

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Corrections to above article made on 19-Jun-2014.