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As a result of dramatic market volatility of the past few months, research from James Hay has shown a rise in importance in cash, with cash comprising more than 35 per cent of some Sipp portfolios.

However, investors may be unaware of which banks are holding these accounts on their behalf and whether or not they are getting the best rates from them.

Andy Pennie, marketing director for James Hay, said with the average Sipp cash balance estimated at £46,500 people with Sipps could be missing out on the best return and the hunt is on as investors asset allocate to safer asset classes.

He said: “There has been a lot of discussion about how people protect their savings in the current economic environment and with an average of 15 per cent of Sipp portfolios being held in cash, investors need to similarly consider where their money is being held and the rate they are receiving.”

Douglas Jones head of individual pensions marketing for Aegon said: “Most Sipp providers have a trading account – where money can flow in and out of. The rate of interest will depend on the amount of cash deposited.”