Vanguard SIPP cash interest

Johnny_Doe

Just had an email this afternoon from Vanguard:

"Dear Client,

Last month we emailed you to let you know about changes to our cash interest rate. This message confirms those changes came into effect on the 23rd of March.

You now receive interest at a managed rate, rather than a variable rate. This means you receive interest at a rate that is set by us, that we will regularly review and update.

The interest rate is currently 2.20%."

So BOE increased rates again today and Vanguard are LOWERING theirs..

Now I need to transfer my sipp yet again!! Vanguard will lose a lot of business over this decision...

NedS

Why not put the cash into Vanguard's Short Term Money Market fund which tracks the overnight SONIA rate?

https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/overview

dunstonh

Now I need to transfer my sipp yet again!! Vanguard will lose a lot of business over this decision...

Vanguard's platform exists as a distribution channel to a range of its investment funds.   It does not exist to be a home for deposits.

The platform side is probably loss making or breakeven.  The money made will be in the fund charges.

Albermarle

Johnny_Doe said:

Just had an email this afternoon from Vanguard:

"Dear Client,

Last month we emailed you to let you know about changes to our cash interest rate. This message confirms those changes came into effect on the 23rd of March.

You now receive interest at a managed rate, rather than a variable rate. This means you receive interest at a rate that is set by us, that we will regularly review and update.

The interest rate is currently 2.20%."

So BOE increased rates again today and Vanguard are LOWERING theirs..

Now I need to transfer my sipp yet again!! Vanguard will lose a lot of business over this decision...

There are other threads on this topic. It seems that Vanguards cash interest rate was above its competitors, and they have adjusted it to be more in line with similar providers. I think you will struggle to find a similar provider paying a better interest rate on cash, and they well be more expensive in other areas.
Always worth having a look around, but I would not hold your hopes up. 

NoMore

Johnny_Doe said:

..

Now I need to transfer my sipp yet again!! Vanguard will lose a lot of business over this decision...

They really won't and the business they do lose is business they don't really want anyway.

DavidT67

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

L9XSS

Reduced from 3.2% to 2.2% for cash held in pension. I’m still happy with that rate whilst I ponder where to invest my 60k. I have about 75k in EFTs on the Vanguard platform presently.

Steve_666_

Anyone have a definition for a lose leader and why it wont always be available?

Johnny_Doe

I've been looking at the Minerva Sipp lite £400 annual fee and 4.05% with union bank. With my sizeable sum minus £400 fee, it works out 3.6% so around same as I was getting with vanguard..

Albermarle

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

NedS

Albermarle said:

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

and the Money Market fund I linked in the first reply, which is available in the Vanguard SIPP, beats all of those as it tracks the SONIA overnight rate.