Pension deposit account 4.10% fixed for 3 years

BrianD

Hi

Yes I did consider Sipp Centre but I tend to do my own research and this was an adviser only route, as to the fee it still makes sense to me and wasn't dissimilar to the fees elsewhere for various options.

Cautious_Investor_3

BrianD wrote: »

Hi

Yes I did consider Sipp Centre but I tend to do my own research and this was an adviser only route, as to the fee it still makes sense to me and wasn't dissimilar to the fees elsewhere for various options.

Cool, main thing is I guess that you considered all options.

Hope it works out for you, be interested to know what their service is like.

The Cautious Investor

BrianD

I have a couple of friends who are using them and that helped the decision but I have looked at around 60 sipp offerings in the last few months and I am comfortable with the decision as the charge gives many more services which I will probably not use but at least I have the choice.

SallyG

Why do people with a Sipp or any other pension put money into a cash fund?
In my case I was in a scramble to put a share of a pension awarded on divorce somewhere safe until I came round enough to be capable of making any decision; the direct sales person recommended about 25% should be held in cash.
To my addled brain - having no cash to speak of that sounded as though I could access it no probs - at the time I had no idea that accessing cash in a pension is byzantine and life threatening.
I am now frozen by fear and indecision.
As far as I'm concerned the pensions advice available is cryptic clues in sanskrit and the translators are not on my side.

Linton

SallyG wrote: »

Why do people with a Sipp or any other pension put money into a cash fund?
....

Three sensible reasons I can think of:

1) As with yourself, somewhere to put put money temporarily.

2) As part of a balancing strategy. For example, you could have 20% in cash and 80% in equities. If the equities do very well, sell some to keep the 20/80 split. If they drop to less than 80% buy more with the excess cash. In this way you are selling when the market is high and buying when low.

3) As you approach retirement put increasing amounts of your pension in cash to safeguard against inconveniently timed market falls.

In none of these cases are you expecting to make any significant return from the cash.

Cautious_Investor_3

Hi

Managing cash within a pension fund is similar to doing it outside with your savings, although there are a couple of added complications:

1. It has to be done via a SIPP (or indeed a SSAS) which carry charges, these eat into the cash return, it is therefore imperative that an investor finds the lowest charge SIPP possible which in turn allows them to access the types of investment that they want

2. There are a limited range of deposit accounts available for a pension, the link below covers the best buys but there is just not the range of accounts available that there is for money outside of a pension:

http://www.!!!!!!.uk/free-services/best-buy-savings-accounts/accounts-for-pensions/

3. An investor needs to bear in mind the compensation arrangements as not all accounts are FSCS covered.

I hope this helps.

The Cautious Investor

purch

in fact it seems that nearly 40% of their customers are in cash

That, in itself is a scandal :eek:

Cautious_Investor_3

purch wrote: »

That, in itself is a scandal :eek:

In what way? Because of the poor rates HL pay on cash?

The Cautious Investor

purch

In what way?

In the way that 40% of the people who have been 'conned' into thinking that a SIPP is just a cheap pension wrapper, rather than a wrapper that allows experienced/sophisticated investors access to investments that are not available in an ordinary personal pension, are in a position that they do not know how to self invest their pension effectively and just leave their money uninvested and 'earning' a pitiful interest rate.

This was not what SIPP's were meant to be used for.

It's a scandal that so many have been drawn into these products by misleading marketing, and poor journalism from the mainstream financial press.

There are/were many choices available to people who wanted cash like investments within their SIPP, but it is clear that many do not fully understand the choices and possibilities, and probably these people should not be using a SIPP.

Cautious_Investor_3

purch wrote: »

In the way that 40% of the people who have been 'conned' into thinking that a SIPP is just a cheap pension wrapper, rather than a wrapper that allows experienced/sophisticated investors access to investments that are not available in an ordinary personal pension, are in a position that they do not know how to self invest their pension effectively and just leave their money uninvested and 'earning' a pitiful interest rate.

I can't comment on the accuracy of the 40% figure or indeed that they have been "conned" however what I do know is that for some people a SIPP is the perfect place to hold cash or indeed 'near cash'.

A SIPP offers access to cash investments which are not available in a Stakeholder or Personal Pension Plan (which tend to offer Cash / Deposy funds for an average AMC of 1% and whose performance is generally only just positive in the current climate). A SIPP can also be very low charged as often the fees are fixed and therefore for a larger fund when converted into a percentage of the fund are often lower than say a Stakeholder.

Previous posts refer to HL and I would agree that despite the 'low charges' when you are in Cash, the return, which is currently 0.1% is poor. However, that doesn't mean, all SIPPs and Cash combinations are equally poor value.

The Cautious Investor