SIPP Advice please.

mickyrod

Hi,

I have recently set up a SIPP with Hargreaves Lansdown and this has now gone into drawdown as I wanted to take the 25% lump sum. (I now have this). I will retire next month and will be looking to take regular amounts over the next five years via flexible drawdown. The fund is around £49k and I will take approx £8k per year to keep me in the 20% tax band.

At the moment I have all my SIPP in cash. The question I am asking myself is: should I keep this fund in cash for the next six years? I do not like risk, so are there better low risk options for my fund?

soperman

As you are totally risk averse it's probably best you stay in cash although the HL gross interest rate is a dismal 0.10% p.a. for balances less than £50K. HL do offer a 3 month fixed rate but details are awaited for the next available rate from 31 May 2012 - the last rate was 2.0% p.a.

mickyrod

OK Thanks for that. I will keep a look out for the fixed rate.

CannySaver_2

Hi Mickyrod

Why not look at an alternative SIPP provider with a range of SIPP deposit accounts? To be fair if you want zero capital risk, then cash deposits and deposit based structured products are probably the only options you have.

I'd avoid HL for cash due to the really poor rates, there are plenty of SIPP providers who will allow access to all SIPp deposit accounts, yes, the fees will be higher but at least you will be getting a 'half decent' interest rate. I guess on a fund of £49k you need to compare the additional charges with the additional interest you are getting.

A couple of links to help you:

Best buy table for SIPP deposit accounts (loads of choice here):

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

List of SIPPs which allow unrestricted access to SIPP deposit accounts:

http://www.!!!!!!.uk/sipp-zone/help-choosing-your-sipp/unrestricted-access-to-sippable-deposit-accounts/

Hope this helps, probably time to get the abacus out

The Canny Saver

mickyrod

Many thanks Cannysaver