Commutation Loan

Who is this loan for?

This loan is for you if:

  • you work for an employer (see the list below) who will send us the loan repayment direct from your salary or stipend AND
  • you are a member of their defined benefit occupational pension scheme that includes a lump sum (known as a commutation)
  • you are intending to retire within the next three years
  • you looking for a personal loan between £5,000 and £40,000 (the loan amount should not exceed 85% of your predicted pension lump sum)
  • the interest only repayments will result in the loan being more affordable
Loan Value Monthly Interest Only Repayment
£5000 £33.20
£7000 £46.40
£10000 £62.00
£12500 £77.50
£15000 £93.00
£20000 124.00
£25000 159.25
£30000 £191.10
£40000 £254.80

Before you apply

The loan is given on an interest only repayment plan with the agreement between the parties that the principal (that is the amount of the loan) will be repaid in full on the retirement of the borrower (or three years from the date of the agreement whichever is the sooner date). The loan will usually be repaid from the "commutation" i.e. lump sum element of the pension. Like all Churches Mutual's loans, there are no penalties for early settlement. If during the three year period you decide to defer your retirement you can change the agreement to repay the principal but this would be at the Credit Union's standard lending rate for the amount at the time.

The following employers are currently part of the payroll deduction scheme:

  • Methodist Connexion
  • Methodist Ministers
  • Church of England
  • Church Commissioners
  • Church of England NCIs
  • Church of England Pensions Board
  • Church of Scotland
  • Crossreach
  • Church in Wales
  • Diocese of Oxford
  • Diocese of Salisbury MAT
  • United Reformed Church
  • RC Diocese of Westminster

If you are not an existing member of Churches Mutual please check your eligibility before completing the application form.


Churches Mutual now uses ‘Open Banking’ to assist us in assessing the affordability of the loans we make. This means that in most cases it will no longer be necessary to send us bank statements in support of your application (unfortunately the Co-operative Bank is the main exception to this), instead you will receive an email with a link that enables you to give permission for us to download a report to help us with assessing the amount of income you have available to repay a loan. If Open Banking is new to you Martin Lewis has a good introduction on his website:

If you cannot or do not wish to use open banking please provide banks statements as requested in the application form. You can also use this method to send us a copy of your most recent annual defined benefits pension statement.

See our FAQs if you're unsure how to send your statements to us.

Apply for loan