How do I invest a private pension pot at fixed interest rate?

stoem

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

Thanks!

Pat38493

I think that most pension providers don’t support holding money in classic style savings accounts.

If you want a truly fixed return, you would have to invest it in gilts or bonds and hold them till maturity - this will require you to do a bit of research as it’s not as simple as just opening a savings account and requires an understanding of a few concepts - there were one or two recent threads about it here.

The easier and more convenient approach would be to put the money in a money market fund - money market funds are generally designed to track the BOE base rate as close as possible so they don’t require you to actively manage the process as much.

Marcon

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

Thanks!

It's easy - but unfortunately not the answer you want. You don't because pension schemes don't offer that sort of option.

sevenhills

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

The real rate of return on a pension including charges is likely to be higher than any savings account.

dunstonh

sevenhills said:

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

The real rate of return on a pension including charges is likely to be higher than any savings account.

Plus, the explicit charges on investment funds nowadays are lower than the implicit charge on savings accounts.

Albermarle

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

Thanks!

As said most pensions do not provide this facility but some smaller/niche ones do . The one most commonly mentioned is this one,
Minerva SIPP | InvestAcc Pension Administration : InvestAcc Pension Administration (investaccpensions.co.uk)

Pat38493

Albermarle said:

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

Thanks!

As said most pensions do not provide this facility but some smaller/niche ones do . The one most commonly mentioned is this one,
Minerva SIPP | InvestAcc Pension Administration : InvestAcc Pension Administration (investaccpensions.co.uk)

Does this only work with specific savings or deposit accounts that support this function, or are they saying they can hold any available savings account inside the SIPP?

artyboy

Of course the alternative here if the OP has a more 'standard' SIPP already is to put the funds in a sterling money market fund - it's not exactly the same as a fixed term savings account, but it will pay close to base rate, and the capital risk is (IMO) negligible.

Saves the need to open a more niche SIPP...

Albermarle

Pat38493 said:

Albermarle said:

stoem said:

This should be an easy one. Currently, fixed savings and cash ISAs offer around 6% interest.
How do I invest my pension pot or part of it for a year or two at those rates in the simplest way?

I currently have 2 private pensions, a SIPP and one with Aviva which I want to move anyway as it charges far too much in fees.

Thanks!

As said most pensions do not provide this facility but some smaller/niche ones do . The one most commonly mentioned is this one,
Minerva SIPP | InvestAcc Pension Administration : InvestAcc Pension Administration (investaccpensions.co.uk)

Does this only work with specific savings or deposit accounts that support this function, or are they saying they can hold any available savings account inside the SIPP?

I think that only a limited list of savings providers offer accounts that can be held in a SIPP.

stoem

artyboy said:

Of course the alternative here if the OP has a more 'standard' SIPP already is to put the funds in a sterling money market fund - it's not exactly the same as a fixed term savings account, but it will pay close to base rate, and the capital risk is (IMO) negligible.

Saves the need to open a more niche SIPP...

That’s basically what I had in mind. A product inside a SIPP that pays a similar fixed rate to a run of the mill cash ISA or fixed term savings account. It doesn’t have to be a ‘savings account inside a SIPP’’ setup. 

Or to put it another way: I’d like to de-risk some of my pension fund and take a 6% return over say two years. Then rethink/restructure after that time. 

Albermarle

stoem said:

artyboy said:

Of course the alternative here if the OP has a more 'standard' SIPP already is to put the funds in a sterling money market fund - it's not exactly the same as a fixed term savings account, but it will pay close to base rate, and the capital risk is (IMO) negligible.

Saves the need to open a more niche SIPP...

That’s basically what I had in mind. A product inside a SIPP that pays a similar fixed rate to a run of the mill cash ISA or fixed term savings account. It doesn’t have to be a ‘savings account inside a SIPP’’ setup. 

Or to put it another way: I’d like to de-risk some of my pension fund and take a 6% return over say two years. Then rethink/restructure after that time. 

Most likely you do not do this, but we often see posters who look at each part of their finances ( cash savings, Pension investments, non Pension investments etc ) as separate items.
In your case for example, turning pension investments into cash within the pension, would make more sense if you had limited cash savings outside the pension. However if you had substantial cash savings outside the pension, then it would probably be best left fully invested.