Many high-profile providers of Sipps (self-invested personal pensions) are paying close to zero interest rates on cash in the account, with no choice in the account, with no choice of other accounts, after tempting investors with high introductory rates.
James Hay, part of the Santander group, attracted customers in a year ago with a one-year cash bond rate of 6.4%, but this has now switched them onto a default rate of 0.00001%. Steve Forbes of Alan Steel Asset Management, says one of his clients attracted by the rate last year had switched his £230,000 Sipp to James Hay, and was now being offered a 1.2% rate fixed for 12 months. On attempting to switch the cash to another account, such as Scottish Widows paying 5.%, he found no external cash accounts were allowed.
James Hay says external cash accounts can be held in its Sipp but only through a discretionary investment manager, and that its offer is “broadly in line with market rates” for Sipp bank accounts. …………..
Quote courtesy of The Sunday Herald
Sunday, 22 November 2009
