Remortgage to top up pension?

Legacy_user

Hi everyone

I'd like to borrow on mortgage to put into my sipp pension, is this allowed?

My affordability is too borderline to use cards to do it and then clear the cards

Thank you:beer:

Thrugelmir

Will your lender allow you to release funds for this purpose? Probably not. Though you could lie when applying for the loan. Not something I'd recommend in case it backfires at a later date. If it's a significant sum the lender may require additional information to support the application.

kingstreet

Once you've got the money and put it in your SIPP, presumably you're not going to put it in insured funds, so what's the plan?

System

Kingstreet - plan was vanguard global small cap, I am decades away from retirement. When I get close i'd go something like vls20 in drawdown, I am flexible as to when I retire so I can wait out a market cycle

I do find it strange that spending the money/ clearing cards is more acceptable than something responsible like pension

kingstreet

MatthewAinsworth wrote: »

Kingstreet - plan was vanguard global small cap, I am decades away from retirement. When I get close i'd go something like vls20 in drawdown, I am flexible as to when I retire so I can wait out a market cycle

I do find it strange that spending the money/ clearing cards is more acceptable than something responsible like pension

You may find your purpose of borrowing is viewed as speculation, rather than investment.

However, all you can do is give it a try and see what happens. If you don't want to do the legwork of finding potential lenders, have a broker do it for you.

enjoyyourshoes

Instead of a lump sum, why not work out what you can afford monthly and set up monthly plan?

I would consider it best to manage within your own financial envelope than stretching things in a none legitimate fashion,

System

Kingstreet - sadly they may, but it is investment, I don't time the market, and it's a long term plan, especially being a pension. Will try broker but won't overly risk remortgaging to a better rate on the outstanding balance.

Enjoyyourshoes - it'll have longer to compound if I get it all sooner. Drip feeding does reduce volatility, but that's not so important in the accumulation phase (more when selling)

enjoyyourshoes

But its legal and can be planned within your financial envelope?

System

I'd think as long as it was honest it's be legal, I have better affordability than when I first bought due to job improvement and nursery funding, and I get extra tax credits back on extra pension contributions too, as it effectively reduces my income

Thrugelmir

MatthewAinsworth wrote: »

I do find it strange that spending the money/ clearing cards is more acceptable than something responsible like pension

Days of treating property equity as something that can be withdrawn like cash from an ATM are long gone. Debt consolidation is certainly not as straightforward as you suggest. Lenders know that it provides an answer but not a solution to the underlying problem. Statistical evidence supports this view.

Likewise lenders now a have duty of care towards their customers, i.e. responsible lending. From a commercial perspective better that a customer applies for an unsecured loan product. This can be offered at a commercial rate (of interest that reflects the risk). Rather than the lender commit available mortgage funds which could be lent to a better quality customer, with minimal risk.

mrginge

WhitehouseSignalsOfficial wrote: »

Now I know we’re new to Money Saving Expert ...

New and soon to be banned.

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