Remortgage to boost pension fund?

[richardxjr]

Sanity check please as I can't find any info easily.

Assuming I can borrow extra funds at same (low) fixed rate, this would enable me to top up pension contributions to max 40k pa for a couple years, to maximise tax relief.

(I'm 52btw, 29% LTV at present).

Wonder if I'm missing something very obvious

[BoRED S2upid]

You will probably have to lie to the bank as to why you need the cash but it could certainly work.

[Sarnie]

BoRED S2upid said:

You will probably have to lie to the bank as to why you need the cash

Correct..............

[Mr Pointy]

richardxjr said:

Sanity check please as I can't find any info easily.

Assuming I can borrow extra funds at same (low) fixed rate, this would enable me to top up pension contributions to max 40k pa for a couple years, to maximise tax relief.

Are your earnings enough to allow you to contribute £40k or is this a company contribution?

Why not go the whole hog & borrow a bit more to use up any unused carry-forward allowance.

[richardxjr]

Theoretically I'd be thinking of living off the extra borrowed money to enable me to make max pension contributions as salary sacrifice from my employer.

[LeoSayer]

richardxjr said:

Wonder if I'm missing something very obvious

Other considerations are:
- Are you targetting only HRT relief or basic rate as well?
- Exceeding the LTA...might curtail future contribution plans
- Government could change the goalposts eg. reducing tax free lump sums, further reductions to LTA etc.
- How long will the funds be tied up for and might you have another need for them in the interim eg. house move etc.
- Bigger monthly sacrifices may be slightly more efficient than spreading over the full tax year due to the way NI is calculated (monthly)

I did the same thing a few years back. The intention was to gross up ISAs into my pension via salary sacrifice. I ended up keeping the ISAs and dipping into the offset mortgage for living expenses.