SIPP cash deposits are non-standard assets !

jola5

I am one of a minority who hold their SIPP pension funds in the form of cash in fixed term deposit accounts.
Although the returns are not exciting, if 2 to 5 year fixed term accounts are used the returns are reasonable, bearing in mind the relative lack of risk compared to other investments.
However, on trying to re-invest a matured cash account I was shocked to be advised by my SIPP provider that they could no long allow such investments.

It turns out that the FCA has decided that savings accounts with a term of more than 30 days are now deemed to be "non-standard assets" (unless their T&Cs include a "break" clause, which very few do).
The effect of this is that SIPP providers must either maintain larger cash reserves than previously, or else they must stop allowing this type of investment. My SIPP provider, and I suspect most others, has taken the second option.

The unintended consequence of the FCA's new policy is that if I want to invest in cash deposits I will be more or less restricted to Easy Access accounts, with their low interest rates. This calls into question the whole viability of the SIPP for cash investments.

I have seen no mention in the press or internet of this fairly major change. Does anyone else know more?

xylophone

http://www.ftadviser.com/2015/10/01/pensions/standard-vs-non-standard-8tQKAX3gkIJk3d4zkDkA5J/article.html