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Which SIPPs for cash?

Retirement | SIPP Helpful? 3

Asked by PETERDOM35, submitted 17 September 2012.

Open Quote Which SIPPs allow Interest earning Bank deposits in its Investment Platforms?End Quote

Answered by Justin on 26 September 2012

Almost all 'low cost' SIPPs restrict customers to a single cash account paying little or no interest. The simple reason being it's very profitable for the SIPP provider to do so (they earn a higher rate on the cash and pocket the margin).

The only exception I've found is the James Hay iSIPP, which offers a range of fairly competitive fixed rate accounts from four banks. The downside is that there's a minimum investment of £50,000 per account.

To access the full range of savings accounts available for pension funds (which is still rather limited and uncompetitive compared to conventional savings accounts) you'll need to use a more expensive higher end SIPP (e.g. AJ Bell Platinum SIPP, Alliance Trust Full SIPP). This will typically cost several hundred pounds both to set up and each year as administration fees, so you'll need to factor in these costs when deciding whether it's worthwhile.

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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