Lump sum pay off mortgage on invest in SIPP (over 55)

Markdavid1962

I have a very small mortgage which will be paid off in 4 to 5 years, however I could pay a lump sum (inhertiance) which I am about to receive in to the mortgage (£43k) which would reduce the monthly interest from £143 to £91 per month saving and repaid in 3 years (saving£1872 in interest)
However I also have an active SIPP and as I am over 55 and a high rate tax payer, I am considering paying the £43k in to the SIPP which will also receive 20% Tax relief  added to the SIPP (£8600), I have checked and I can still do this(3 Year Tax relief rule), plus the remaining 20% of the 40% Tax relief I could claim as a Tax rebate (£8600)
So my thinking is to go down the SIPP road and after the Tax relief (£8600) has been paid in, would be to take the 25% Tax free from the SIPP (£14000) and add the Tax rebate (£8600) in April (when i submit the form) and pay this amount of the mortgage (£22600), this would still leave £42000 in the SIPP.
At the same time I would open another SIPP and carry on my normal monthly repayments in to the new SIPP.
Any issues with doing this ?
 

Blackbeard_of_Perranporth

You are far better to put the money into the SIPP, as that gets tax relief, though you are limited by now much you can pay into the SIPP each year, in any year the maximum is £40,000 or your salary, whichever is the lower. You would do as good to put into an isa, and then flow from tehre into your SIPP!

Markdavid1962

Thanks Blackbeard, Can you not go back 3 years, ie using the allowance £40k per year would be £120k minus Pension and SIPP already paid.

edinburgher

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/carry-forward