Sipp cash charges - which is best

Options
chiefie
chiefie Posts: 406 Forumite
First Anniversary First Post
edited 20 August 2017 at 10:02PM in Pensions, annuities & retirement planning
I'm about 18 months from wanting to take my sipp over 3 years. As such I don't want to take a risk and so want to hold cash or as close to the equivalent as poss. It will be under 20% tax band. I do t expect to earn other income

Many thanks in advance

Comments

  • xylophone
    xylophone Posts: 44,413 Forumite
    Name Dropper First Anniversary First Post
    Options
    Do you already have a SIPP or are you intending to open one?

    Hargreaves Lansdown do not charge for holding cash and handle drawdown very efficiently.
  • sandsy
    sandsy Posts: 1,720 Forumite
    Name Dropper First Anniversary First Post
    Options
    Just bear in mind that being in cash carries an inherent inflation risk. So by being in cash for the next 4 years, if inflation was 2.5% pa, and the cash fund paid no interest, the remaining fund in 4 years time would be buy around 10% less than it would today.
  • chiefie
    chiefie Posts: 406 Forumite
    First Anniversary First Post
    Options
    sandsy wrote: »
    Just bear in mind that being in cash carries an inherent inflation risk. So by being in cash for the next 4 years, if inflation was 2.5% pa, and the cash fund paid no interest, the remaining fund in 4 years time would be buy around 10% less than it would today.

    Is there anything else that would do the trick - any bond funds ? Thanks
  • Linton
    Linton Posts: 17,167 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    Options
    chiefie wrote: »
    Is there anything else that would do the trick - any bond funds ? Thanks

    Given your timescale, I cant think of anything you could invest in with a good chance of at least matching inflation that wouldn't incur a moderate risk of losing money.

    What happens to the money once you have withdrawn it? If it's not to be used in the short term you could put it in an S&S ISA for the longer term. And in this case you could put the SIPP money now into the same investments that you would use in the S&S ISA. So the only risk would be the relatively short time out of the market.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards