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20% of Sipp and SSAS investors see returns of 0.5% or less

Research from Investec Bank suggests around 20 per cent of Sipp and SSAS investors are receiving the Bank of England base rate of 0.5 per cent or less on their investments.

The survey, which polled 100 pension IFAs, found that clients typically receive an average return of 1.33 per cent on their cash deposits within a Sipp or SSAS product. Some 71 per cent of pension-focussed IFAs admit their clients’ rate of return on cash deposits is “unacceptably low”.

Investec Bank pensions and trust specialist Lionel Ross says with large amounts sitting in “derisory” accounts, savers could take a significant hit on their final pension pot.

He says: “Despite having an average of 12.5 per cent of their total assets in cash, many savers are settling for interest rates that are unacceptably low.”

This follows research from Defacto last year which suggested that half of pension administrators surveyed had witnessed an increase in the proportion of cash allocated to clients’ Sipps over the 12 months to September, 2009. Nearly a quarter said they had typically witnessed an increase of up to 25 per cent among their clients.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. “Some 71 per cent of pension-focussed IFAs admit their clients’ rate of return on cash deposits is “unacceptably low”.”

    So why dont they recommend that their clients move to an account that attracts higher interest?

  2. If they are in a SIPP or a SSAS why are they sat in cash?

  3. Darren Cook of Moneyfacts recently went on record saying the Uk average savings account interest rate was 0.79%, so if pension savers are getting 1.33% in a tax free environment surely that’s good?

  4. Several Sipp Providers take a “cut” of the interest rate to augmnet their own artificially low headline fees so these to not promote higher yielding accounts. Indeed, some do not permit higher yielding accounts. On the other hand, we as a provider who does not take a cut of the interest rate actively encourage our IFA’s and clients to obtained the highest rates possible and are currently ssessing the use of our clients collective buying power to see if spccial rates can be obtained

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