Imterest on cash within a mainly shares SIPP

DRSMITH

I am 55 soon and plan to move pension pot to a SIPP where I can self trade shares online. During market troughs, holdings will be converted into cash pending ripe buying time, which could be days or months.

I have only been able to trace a handful of SIPP providers that do this, but they offer a derisory interest rate for cash - say below 0.1%!

Are there providers out there that offer higher credit interest, or third party investments that could be used to include for same purpose?

Googling, this seems to be a common issue, but can't trace a solution or best compromise or workaround.

Found this thread, but we're now 12 months on.
(Links not allowed! I'm a new member and it barred me from including link to thread on this forum).

TIA

David Smith

kidmugsy

From time to time Hargreaves Lansdown have offered deposit deals for a fixed 6 or 12 months. You get, say, 2% p.a. rather than the usual nought-point-precious-little.

gadgetmind

I think that James Hay and Standard Life let you hold cash with external banks, but you need a bank that provides accounts for pension trustees.

However, note that trying to time the market is notoriously difficult and most people lose out by trying it.

DRSMITH

Thank-you Kidmugsy and Gadgetmind for your greased lightning replies.

Point noted gadgetmind re not having crystal ball.

I'm avoiding HL. (I am forced to take paid for advice of £500+vat to cover their risk. They won't let me exercise my free will.)

I will contact James Hay and Standard Life tomorrow for more info.

Any other mention of possible providers gratefully rec'd.

ManAtHome

DRSMITH wrote: »

I'm avoiding HL. (I am forced to take paid for advice of £500+vat to cover their risk. They won't let me exercise my free will.)

That's rung an alarm bell - what/where is your pension pot? I just had to fill in transfer forms to move a personal pension into a HL SIPP.

gadgetmind

DRSMITH wrote: »

I'm avoiding HL. (I am forced to take paid for advice of £500+vat to cover their risk. They won't let me exercise my free will.)

Can you expand on that?

BTW, in addition to holding cash, you might also want to check that a provider will let you hold individual corporate bonds and gilts. For the former you need diversity to reduce risk.

As for the merits of holding lots of gilts and bonds right now, that a completely different subject, but the advantages of holding a variety of asset classes are pretty clear.

BTW, I'm a few years off wanting to use drawdown myself but am starting to sniff around for a good platform.

DRSMITH

ManAtHome wrote: »

That's rung an alarm bell - what/where is your pension pot? I just had to fill in transfer forms to move a personal pension into a HL SIPP.

I believe it's because it's whats known as 'final salary scheme' that it means applicant are forced to take pro' advice.
I'm ex-Nat west employee with Royal Bank of Scotland pension scheme.
I understand this a HL requirement not a Gov't or legal requirement.

HL are contactable on phone, so I'd be inclined to ask them direct.
In fairness though, it is important to understand the risks first, so that's a SERIOUS question to pose for yourself if not taking pro' advice.

HTH.

gadgetmind

I'm amazed that they are letting you transfer it at all, and that you want to!

DRSMITH

gadgetmind wrote: »

Can you expand on that?

BTW, in addition to holding cash, you might also want to check that a provider will let you hold individual corporate bonds and gilts. For the former you need diversity to reduce risk.

As for the merits of holding lots of gilts and bonds right now, that a completely different subject, but the advantages of holding a variety of asset classes are pretty clear.

BTW, I'm a few years off wanting to use drawdown myself but am starting to sniff around for a good platform.

See above reply re HL.
I've not bought/sold Bonds before for my-self, other than buy at issue and sell at maturity.
I did look at them, but it seems you have the choice of holding to maturtiy for a 'known' return, or if selling before maturity date, price will be subject to market changes, so not really avoiding the risk it was intended to...if I have understood the Bonds market correctly.

gadgetmind

No, that's the way bonds work. If you hold to maturity, and the company doesn't go bust, you know exactly what you're getting.

Bond funds are not so predictable.

Buying bonds in your ISA or SIPP is exactly the same as buying unwrapped as long as the platform lets you do it. HL are pretty good in this regard but they do have that 0.5% (capped at £200 pa) for holding anything other than funds in a SIPP.

DRSMITH

gadgetmind wrote: »

No, that's the way bonds work. If you hold to maturity, and the company doesn't go bust, you know exactly what you're getting.

Bond funds are not so predictable.

Buying bonds in your ISA or SIPP is exactly the same as buying unwrapped as long as the platform lets you do it. HL are pretty good in this regard but they do have that 0.5% (capped at £200 pa) for holding anything other than funds in a SIPP.

My context is to hold cash temporarily.. days or months, pending share purchase. Bonds imply longer period (if holding until maturity), so wouldn't work for my shorter term need. Do you concur?