3% ish Easy Access... At Vanguard!

ossie48

Yep. My wife as a non tax payer is doing the 'add £2880 to a SIPP get £700 free' trick. Its in cash and earning 3% so no rush to take it out. 

gele

Hi I am a saver but not really an investor. However since I only have a small work pension I opened a Vanguard lifestyle 60% equity SIPP a few years ago. There isn't a great deal in there but when I log on I can see my holdings, the main pension pot plus below it the word cash. When I pay into the pension it shows initially in cash before I invest. Is this the cash account whereby if I deposited funds i would earn effectively 3% interest. At the moment there is no cash in there so I am not going to see any interest accruing.
I'm sorry if this is a really silly question. As I say I am not really an investor.
Thanks 

Altior

Assuming you have a regular contribution, you can simply edit this under Payments and add cash as an option for the proportion of some or all of your regular contribution. It's right at the bottom of the list. 

Altior

On the pdf that everyone is forced to download, but I assume practically nobody actually reads thoroughly, it states:

Interest on cash balances Cash balances held within your Vanguard Personal Pension may earn interest at a variable rate, based on the rate we receive from the bank. The current rate applicable is 3.45%.

Currently we keep the first 0.20% of the interest we receive, to cover our costs.

Where payable, interest is earned daily and normally paid into your account on the first business day of each month. Please see ‘the Vanguard Personal Pension Key Features Document' for further information.

It's widely predicted that the base rate will get another hike this coming week.

gele

I am not making regular contributions at the moment, just ad hoc ones but when I do add funds they go to the cash section first. I am over 55 so can withdraw whenever but what I was wondering was, is this where I can hold cash and gain 3% without necessarily having to invest it immediately.

Altior

It's a similar process for one off contributions, go to invest under portfolio options, and select your own funds. At the bottom of the list of funds is the Cash option. 

lindabea

Something to bear in  mind is that Vanguard (unlike banks) DO NOT notify HMRC of any interest received from funds  in the cash account.  So you will need to tell HMRC if you received any interest (from Non ISA accounts) although the amount will be shown on the tax voucher. 

chels

gele said:

I am not making regular contributions at the moment, just ad hoc ones but when I do add funds they go to the cash section first. I am over 55 so can withdraw whenever but what I was wondering was, is this where I can hold cash and gain 3% without necessarily having to invest it immediately.

That's correct.

Qyburn

Altior said:

Currently we keep the first 0.20% of the interest we receive, to cover our costs.

Do they also charge the platform fee (0.15%) on the cash balance?

hallmark

lindabea said:

Something to bear in  mind is that Vanguard (unlike banks) DO NOT notify HMRC of any interest received from funds  in the cash account.  So you will need to tell HMRC if you received any interest (from Non ISA accounts) although the amount will be shown on the tax voucher. 

Presumably no need to tell HMRC about any interest on cash held in SIPPs either?