Thus, providers claim that PLF can assist business owners in achieving financial and operational independence, control and flexibility.
The risks associated with PLF make it less appropriate for some, particularly those who have few non-pension assets or whose organisation’s cashflow position is such that it would prevent scheme repayments.
[9][10][11] Working with Financial Conduct Authority (FCA)-regulated advisers and pension administrators who ensure all Her Majesty’s Revenue and Customs (HMRC) scheme registration criteria are met is, therefore, to be recommended.
Using some of the accrued pension benefits of an individual (or a group) to fund a single trading entity is a relatively high-risk undertaking.
It is possible to mitigate the risk of default to an extent and the provision of security or collateral is a typical characteristic of PLF transactions.
[12] Thus anyone who is looking to engage in a PLF programme should be encouraged to research the options thoroughly, giving equal attention to assessing the credibility of practitioners.