Investors miss out on £579m in poor paying cash Sipps

  • Story by: Gemma Westacott
  • Magazine: FTAdviser
  • Published Thursday , July 24, 2008

Investors could be missing out on as much as £579m in interest collectively each year by selecting poor paying self invested personal pension (Sipp) cash accounts.

Advertising

The warning from Sipp provider James Hay comes after research estimated that the average Sipp cash balance is £46,500.

As such, James Hay calculates that up to 300,000 investors could be missing out on around £1,930 per year. This is based on the difference between the lowest rates and James Hay's eSIPP special deposit rate (fixed rate offer) of 6.90 per cent.

James Hay said market volatility was driving Sipp investors to move segments of their portfolios into cash. It estimates that £13bn could be held in Sipps in cash currently, as cash comprises over 35 per cent of some Sipp portfolios.

Chris Smeaton, propositions and e-commerce manager at James Hay, said: "Cash rates are now becoming a key focus in Sipps as investors increasingly asset allocate to the safer havens of cash. In a lower return environment, these differences in cash rates are quite substantial.

"Our research shows around 15 per cent of Sipp portfolios are held in cash, and investors need to consider cash rates when they chose a Sipp."

FTAdviser BLOGS RSS

Latest Post  

‘Bungee brood’? Hell no, hand me the CTF

It appears that I have moved into that next fateful stage of life (or at least I’m d... read more

SIGN UP TO NEWS ALERTS



AXA Winterthur's new generation of SIPP offering

Tony Moore, head of retirement development at AXA Winterthur, talks about the company’s new generation of SIPP offering; Family Suntrust.

Click here to read the full feature

FTAdviser  Jobs  RSS

More positions