Cash Savings in a SIPP

jamesbp_2

Couple of questions that you may be able to help with ....

1. Presuambly the same FSCS compensation rules apply to SIPPS as they do to individuals.

2. Therefore just as important to spread any cash savings above the FSCS limit across multiple bank accounts

3. There seems to be a lack of high interest current / savings accounts available for SIPPS .... can anyone point me towards banks that provide high interest accounts to SIPPS

Many thanks

JP

dunstonh

The operation of SIPPs is protected under the FSCS. A claim arising because a SIPP becomes insolvent would be 100% of the first £30,000 and 90% of the next £20,000.

The assets within the SIPP are treated individually if one of those becomes insolvent and the deposit or investments protection applies to each holding.

3. There seems to be a lack of high interest current / savings accounts available for SIPPS .... can anyone point me towards banks that provide high interest accounts to SIPPS

Why would you want a current account for a SIPP? Plus most savings accounts on the high street are retail savings. The SIPP providers often have access to institutional savings accounts which usually pay better rates. However, they also typically expect higher minimums to be deposited.

For reference, insured SIPPs or fund supermarket pensions have higher FSCS protection than a SIPP with 100% of first £2000 and 90% of the rest with no upper limit. This is because they fall under life assurance FSCS protection. So, if you are ultra paranoid, then an insured SIPP or fund supermarket pension (or even quality personal pension) may be the better option.

EdInvestor

dunstonh wrote: »

The assets within the SIPP are treated individually if one of those becomes insolvent and the deposit or investments protection applies to each holding.

For reference, insured SIPPs or fund supermarket pensions have higher FSCS protection than a SIPP with 100% of first £2000 and 90% of the rest with no upper limit.

In effect, for people invested in a spread of unit trusts from different houses with a max of 48k in each investment house, plus the same amount in cash will in fact get slightly more protection in the SIPP surely?

AlexGreen_2

James

if you want to hold cash and get (possibly) the best rate available (for a SIPP) then use the new cash based ETF, pays around 5% after the 0.15% annual management fee.

Ticker is XGBP at it's priced around £179 per share.

PS. Any of you switched on IFAs know is this will be allowed in a Stocks & Shares ISA, nobody seems to have a clue at present - I'm talking about the ISA brokers I've spoken to.