How to turn a pension pot in to a Classic Car collection

Turn your pension pot in to a Jaguar XJ220 – and more

With new pension rules allowing those over 55 to cash in their pension, one man is turning a chunk of his pension in to a classic car collection.

When the government revealed it was changing pension rules to allow over 55s to cash in all or part of their pensions, the then pensions minister, Steve Webb, declared the government were quite relaxed about pensioners cashing in their savings and blowing it on a Lamborghini. But it seems there’s a much better way of getting a supercar from your pension pot – go classic and fund a chunk of it.

One smart customer of Magnitude Finance has done just that and ended up with a classic car collection by using just a chunk of his pension pot – and some clever finance – to acquire a Bugatti EB110, Jaguar XJ220, Ferrari 512M and Ferrari 430 Scuderia in a scheme that looks set to make him a healthy return, and without increasing his outgoings.

The cost of the cars is well over £1 million, but by financing a big chunk over four years – with low interest rates and a balloon payment at the end – this pensioner has managed to acquire a fleet of classic cars by only spending what it would have cost to buy one, and is funding the finance payments with what he’s no longer spending on pension contributions.

It’s a clever way to make the most of your pension pot, and with any luck the pensioner will come out of his scheme in four years with a healthy – and tax free – lump sum if he decides to sell and cash in. But if he doesn’t, he can extend the finance.

So now you know how to buy a fleet of classic cars with your pension pot – and probably make a better return (and a tax free one at that) than your pension fund managers ever achieved.