A new partnership between the Bank of Scotland and Hotbed, a UK private investor syndicator, is to make leverage secured on a wide range of assets held in self-invested personal pensions available through a SIPP provider.

Holders of the Hotbed alternative SIPP will be able to borrow up to 50 per cent of the value of eligible investments held in their SIPP through the new Bank of Scotland Pension Share Accelerator. Eligible investments include shares quoted on major international stock markets, gilts, unit trusts, insurance company managed funds and cash.

Hotbed says it expects to see more people using their SIPPs to invest in unlisted companies following the UK's pre-budget report changes to capital gains tax announced last week.

The capital raised can be used to invest in any asset allowed under UK tax rules, such as unlisted companies and syndicated commercial property investments. Loans will be available on a seven year interest-only basis with a minimum loan of £100,000 ($200,000), at 1.65 per cent over Bank of England base rate.

Research conducted recently by Hotbed found that 95 per cent of SIPPs do not contain any gearing, despite the “A Day” changes in April 2006 allowing gearing of up to 50 per cent of the fund value.

Gary Robins, chief executive of Hotbed, said: “Gearing should be a really important feature of a SIPP portfolio, enabling investors to dramatically increase their fund size and make larger or more diversified investments that could potentially generate greater returns without having to put up all the cash themselves. So we are delighted to be able to make this innovative new loan product from Bank of Scotland available to our members who have a Hotbed alternative SIPP."

The Hotbed alternative SIPP allows investors to hold alternative assets such as interests in private equity and commercial property limited partnerships alongside more traditional assets such as quoted stocks and unit trusts.