SIPP for holding cash (interest bearing?) for last minute 25/26 contributions

gravel_2

Helping a family member. They are winding down with work, likely to have a final tax year of earning salary before retiring permanently aged 61. They have never really thought about pension and have paid in modest amounts to a DC pension.

The plan currently is to withdraw as much as possible within personal allowance/basic rate between 27/28 and state pension entitlement in 6 years time. Money will be reinvested or saved outside the pension wrapper. Fully depleting the pension is doable given the relatively low value of the pension.

I have suggested inflating contributions this year and next to make the most of tax relief while still earning. They are open to it but would prefer to do so in a way that results in cash ready to invest (possibly earning interest?) rather than immediately investing, or cash-like/gilts expiring next few years. Given we are at the end of the tax year there's little time to hum and haw about investment choices and the current volatility of the market. I am also not sure what options, or flexibility, their current DC pension product has - suspect not much.

Their workplace pension is with Scottish Widows in the default retirement age investment (set to 65) and I believe overpayments would be automatically invested into that same fund.

Looking to understand which SIPP may suit the above requirements (ideally no/low fee) and whether it's realistic that they could open and fund before end of tax year. Not overly fussy about types of investments available on the chosen platform as can always switch later.

DavidT67

Most SIPP providers don't charge a platform fee for uninvested cash. Any one of the big four stockbrokers also don't charge for UFPLS or FAD access. So AJ Bell, Fidelity, Hargreaves Lansdown or Interactive Investor.

Albermarle

Their workplace pension is with Scottish Widows in the default retirement age investment (set to 65) and I believe overpayments would be automatically invested into that same fund.

Normally these type of workplace pensions do not have a cash fund. However they should be able to switch money around from the default fund to other investment funds, which would be very low risk/cash type funds.

Otherwise it is very easy and quick online to open a modern SIPP, with the providers already mentioned above.

Worth noting though that the interest paid on the cash is not high but at least some is still paid.

Gambler

I recently opened a SIPP with Scottish Widows. It was very easy and quick to set up especially as I also have a workplace pension with them.

They prefund 25% tax relief and pay 3% interest on uninvested cash.

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81939824#Comment_81939824

Note that II charges a fixed monthly fee, but HL (and possibly the others) charges a %.

% charging may be preferable assuming the amount deposited would be small (if placing in any type of investment fund).

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81940722#Comment_81940722

Also some of the % fee chargers have a minimum annual fee to look out for.