Investec Private Banking has launched a 30-day notice account specifically designed to address issues raised by impending changes to Sipp capital adequacy rules.
The new Sipp & Ssas Saver Account has a rate of 1.20 per cent AER and a minimum balance of £25,000.
Linda Brown, head of savings at Investec Private Banking, said: “With uncertainty around increases in the Bank of England base rate as well as turbulent financial markets, Investec aims to provide clients with a welcome respite to this with the launch of the Sipp & Ssas Saver.
“Furthermore, in line with regulatory changes to capital adequacy requirements, the notice period allows Sipp providers to classify this account as a standard asset.”
The new capital adequacy requirements come into effect on 1 September and categorise assets with terms longer than 30 days as non-standard.
Pension trustees will be required to hold additional capital for any non-standard asset held within a Sipp under their administration.
Martin Tilley, director of technical services at Dentons Pension Management, said: “The new capital adequacy regime is quite specific in that assets that cannot be surrendered within 30 days are to be treated as non standard and several Sipp operators as a result have ceased to accept term deposit accounts.
“The move by Investec is therefore prudent as the account is now more likely to be accepted by more operators as it will be able to sit on their books as a standard asset.
“It should also be welcomed by advisers and their clients who have seen the interest rate on default accounts of many operators paying little, if any, interest and the account at least offers an inflation beating return for those monies held.”
Adviser View
Dennis Hall, chief executive of London-based Yellowtail Financial Planning, said: “We tend to be broadly plain vanilla in terms of what we have in Sipps.
“We tend not to get into things like private equity or long-term cash holdings. We don’t see the benefit with interest rates as they are.
“I can see why they are doing it but I am not sure it will capture much market share.”
