Pledge
A bailment of personal property as security for a debt. The pledgor delivers possession to the pledgee, who may sell the property if the debt is not repaid. The pledgor retains ownership.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
The clearest everyday example of a pledge in UK official guidance is the pawnbroking transaction. The Insolvency Service's technical guidance for official receivers explains that a pledge is the term to describe the item given to a pawnbroker in return for a loan, and that if the loan is not repaid within a certain time period, the pawnbroker has the right to sell the goods. The pledgor (the borrower) hands over possession of the item but keeps legal ownership of it unless and until the pledgee (the pawnbroker or other secured creditor) exercises the power of sale.
This possession-based structure is what distinguishes a pledge from other forms of security such as an equitable charge or mortgage, where the debtor typically keeps possession of the asset and the creditor's rights exist over the asset without taking physical control of it. Because a pledgee's security depends on retaining possession, losing possession of the pledged goods (for example, by returning them to the pledgor) can destroy the security interest.
Example
A person who pawns a watch at a pawnbroker's in exchange for a short-term loan has pledged the watch: the pawnbroker holds it as security and can sell it if the loan is not repaid in time, but the customer remains its legal owner until that happens.
Related terms
Official sources
This explanation is drawn from the official sources below; every substantive statement is verified against them. For advice on a specific matter, see our find help page.