Fixed rate cash in a pension?

Triumph13

I'm trying to get my head round my options for that portion of my pot that funds the planned 10 years before DB schemes kick in. Roughly speaking this will be £200k from which I'll want to draw £20k pa for 10 years with a minimum of risk, but not too much inflation loss either. (I'll have plenty of exposure to the markets from the rest of the pot that will be trying to give an additional lifetime income from equities.)
If the money was in an ISA rather than a pension, then some of the deals on 3 to 5 year ISA accounts at around 2% pa would fit the bill quite nicely for a big portion of the money. Unfortunately all the low cost SIPPs I look at pay b#gger all on cash. Are there any Sipps out there where one could get an interest rate on cash comparable to the best ISA deals, but without having charges so high as to make them uneconomical?

moneysaver21

Similar situation here, here are the best sipp cash rates:
http://!!!!!!!!!!!!!!!!!!!!!!!!!!!!/free-services/best-buy-savings-accounts/accounts-for-pensions/

I am opening a 2 year 2% fixed account with BLME. But they won't accept apps from individuals. You need a pension administrator. I'm using a company called atsipp, they have been very good. Their fees are £180 to open, then £200 per year

greenglide

Do you mean this?

www. investmentsense. co. uk/free-services/best-buy-savings-accounts/accounts-for-pensions/

rEMOVE THE SPACES TO MAKE IT WORK.

URL was corrupted. Something to do with just pasting it directly into the message and using the "Insert Hyperlink" icon in the toolbar?

dunstonh

Roughly speaking this will be £200k from which I'll want to draw £20k pa for 10 years with a minimum of risk, but not too much inflation loss either. (

Have you considered a fixed term annuity?

Triumph13

dunstonh wrote: »

Have you considered a fixed term annuity?

The thought had crossed my mind, but I was assuming it would be building in the lousy gilt rates plus a slug of profit for the provider and so would be very expensive - especially as I'd want spouse benefit so the dying early factor would be pretty negligible at 53/55. I would be delighted to be told otherwise though!

Triumph13

Thanks the links guys. Looks like I'm going to have some very complicated sums indeed to do to work out the best options - particularly as I'll have to factor in the new rules about the tax free band on interest and the fact that my wife will have a bit of spare PA so I may be able to use the PCLS and manage a complicated pattern of taxable and ISA bonds without actually paying any tax if I'm careful.
Add in the fact that I'll want to crystallise everything early to avoid it outgrowing the LTA and that I'll be 2 years into retirement before I can actually access my pension and I may end up wishing I'd just gone for dunstonh's annuity!

dunstonh

but I was assuming it would be building in the lousy gilt rates plus a slug of profit for the provider and so would be very expensive

You realise cash savings build in a slug of profit for the bank and are based on interest rates and low too. The annuity would use some of the capital but would also have some mortality gain but the net position is the bit to look at.