Sipp cash charges - which is best

chiefie

I'm about 18 months from wanting to take my sipp over 3 years. As such I don't want to take a risk and so want to hold cash or as close to the equivalent as poss. It will be under 20% tax band. I do t expect to earn other income

Many thanks in advance

xylophone

Do you already have a SIPP or are you intending to open one?

Hargreaves Lansdown do not charge for holding cash and handle drawdown very efficiently.

sandsy

Just bear in mind that being in cash carries an inherent inflation risk. So by being in cash for the next 4 years, if inflation was 2.5% pa, and the cash fund paid no interest, the remaining fund in 4 years time would be buy around 10% less than it would today.

chiefie

sandsy wrote: »

Just bear in mind that being in cash carries an inherent inflation risk. So by being in cash for the next 4 years, if inflation was 2.5% pa, and the cash fund paid no interest, the remaining fund in 4 years time would be buy around 10% less than it would today.

Is there anything else that would do the trick - any bond funds ? Thanks

Linton

chiefie wrote: »

Is there anything else that would do the trick - any bond funds ? Thanks

Given your timescale, I cant think of anything you could invest in with a good chance of at least matching inflation that wouldn't incur a moderate risk of losing money.

What happens to the money once you have withdrawn it? If it's not to be used in the short term you could put it in an S&S ISA for the longer term. And in this case you could put the SIPP money now into the same investments that you would use in the S&S ISA. So the only risk would be the relatively short time out of the market.