Potentially very stupid question re cheap money

[s2sol]

My wife and I are in the fortunate position of being mortgage free. I feel that any time in the next 9 months might be a good time to dump cash into our sipps. However, having worked hard to be mortgage free, we've little cash to do so.

Given that we're early 50's, both in good health and enjoy our jobs, should we get a £100k mortgage and whack it into our sipps over the next couple of tax years?

[bompey]

No. By all means put regular savings in but I wouldn’t borrow to do it unless you have big cojones.

[FredClogs]

It would be a pretty big bet, on 3 things...

A) The value of your investments rising significantly enough to cover the mortgage interest and sipp costs
B) The value of your property not falling faster than the value of your investments rising.
C) You locking the money away until you're 55 at least in an unpredictable equity market, you probably won't get enough return in a sipp with a cash or bond portfolio to cover costs, that much would seem to be clear.

[Sarnie]

bompey said:

No. By all means put regular savings in but I wouldn’t borrow to do it unless you have big cojones.

^This.

Plus no lender would agree to it either.

[s2sol]

Ignoring Sarnie's valid point, for argument's sake, and to keep the maths simple. We take out a mortgage for £64000. We each immediately invest £32000 into a sipp. The government tops that up to £40000 each. We then repay the mortgage. We'd obviously be liable for arrangement fees, interest and early redemption fees. I've no idea, but I can't imagine they'd be anywhere near the £16k we could effectively make overnight.

[TCX]

Seriously
Given that we're early 50's, both in good health and enjoy our jobs, should we get a £100k mortgage and whack it into our sipps over the next couple of tax years?
Have the past few weeks not shown you how quickly things change?
Go for it,be interested to hear how it goes?

[FredClogs]

s2sol said:

Ignoring Sarnie's valid point, for argument's sake, and to keep the maths simple. We take out a mortgage for £64000. We each immediately invest £32000 into a sipp. The government tops that up to £40000 each. We then repay the mortgage. We'd obviously be liable for arrangement fees, interest and early redemption fees. I've no idea, but I can't imagine they'd be anywhere near the £16k we could effectively make overnight.

The tax you save or are rebated on the money going into a pension is only half the equation.

When your pension goes into draw down you have to pay tax on the money coming out. And I don't imagine in the future that's going to go down, we've just remortgaged the country for the next 50 years!

An ISA might be a better bet, but this is a gamble make no mistake.