SIPP Cash

Wolster

Hi

I am in the fortunate position of having recently grown my SIPP pension pot from £80k to £680k, (I had reached higher to £1m but then my fortunes reversed).

Given I grew the pot on very high risk (never to be repeated) bitcoin related share & russian commodities (hence the big backward step), I now find myself holding virtually pure cash (+ a little gold exposure) & a minimal/no risk minset going forward. Yes a huge reversal.

I do not wish to re-enter the markets & I am now content to just top up my SIPP with £40k salary sacrifice per annum till I reach the Nirvana £1,073,000 Cap.

My current provided HL provide something like 0.20% interest on cash balances held in a SIPP, & I am inexperienced in cash investing products & have never even phoned a broker or advisor.

How can I reach my chosen target faster than contributions & 0.20% interest, without taking on an ounce of risk (I accept my interest returns would be low, but any inprovement on 0.20% is a good outcome at this stage with my new low risk tolerance attitude)

Any help would be much appreciated

Linton

What about inflation?  At the moment your pot is falling in value by more in real terms than you are contributing.   You are very unlikely to beat inflation with zero risk investments.  I suggest you consider a moderate % in well diversified investments.  There is an extremely large gap between 100% cash and bitcoin/Russian commodities.

When do you plan to access your pension?  If it  is still 20 years away, at 2.5% inflation £1M would be worth approx £600K.

Albermarle

I am sure  that HL would not allow Bitcoin, or Russian commodities in their SIPP . Do you mean you have recently transferred your SIPP from another 'specialised' SIPP provider?

How can I reach my chosen target faster than contributions & 0.20% interest, without taking on an ounce of risk

If it is all in a SIPP, then you can not. If it was outside a SIPP you could access better interest rates.

squirrelpie

There are money market ETFs. I've no idea whether they might be of interest.

Notepad_Phil

Unfortunately HL don't currently allow access from a SIPP to their Active Savings https://www.hl.co.uk/investment-services/active-savings on which currently the best easy access is 0.95% which would certainly beat the 0.2% and there are other fixed term savings accounts as well paying upwards of 2%. But they do say "although we hope to offer this in the future." so maybe keep an eye out on that.

Though I would personally be very hesitant in keeping everything in cash unless I was retiring in the next few years and was buying an annuity (which in my opinion is likely to be a bad decision unless you are extremely risk adverse).

caveman8006

You can transfer to a Minerva Sipp from Investacc which will cost £600 per annum (0.1%) but allow you to access any fixed rate deposit taker listed on the investment sense SIPP deposit rate page.

If you want to be totally risk free, then limit each holding to the £85k cap...I reckon by splitting £425k equally between the best rates rates from United Trust, Close Bros, Teachers Building Soc, Punjab Bank and Cater Allen and putting  the remainder in NS&I Income bonds you should get an average return of around 1.03% after fees.   

shortseller09

caveman8006 said:

You can transfer to a Minerva Sipp from Investacc which will cost £600 per annum (0.1%)   

Investacc Minerva Sipp fee is £400 plus VAT p.a.

westv

When I first read bitcoin and russian commodities I thought it was a wind up LOL!!

caveman8006

shortseller09 said:

caveman8006 said:

You can transfer to a Minerva Sipp from Investacc which will cost £600 per annum (0.1%)   

Investacc Minerva Sipp fee is £400 plus VAT p.a.

Yes sorry, the higher fee is when you are in drawdown...so even higher effective interest rate 

Albermarle

westv said:

When I first read bitcoin and russian commodities I thought it was a wind up LOL!!

It might be. 

Bravepants

You can also have a cash SIPP through Close Brothers Asset Management.