James Hay warns on cash rates for SIPPS

James Hay, UK Self Invested Personal Pensions (SIPP) provider, warns SIPP investors to check the cash rates they are currently getting on SIPPs. Market volatility is driving SIPP investors to move segments of their portfolios into cash. James Hay research has shown a rise in importance in cash - with cash comprising over 30 per cent of some SIPP portfolios.

Furthermore, investors making regular pensions payments into the SIPP may not have fully invested funds given the current environment, meaning that funds will sit in cash. However, the rates offered by SIPP providers vary significantly.

With the average SIPP cash balance estimated at £46,500, up to 300,000 investors could be missing out on around £753 per year between the lowest rates and James Hay's standard SIPP interest rate or as much as £1,618 per year based on the eSIPP special deposit rate (fixed rate offer) of 6.40%.

Chris Smeaton, Propositions & eCommerce Manager at James Hay commented: "Cash rates are rarely focussed on in SIPPs. However, in volatile markets, investors frequently asset allocate to the safer havens of cash. In a lower return environment, these differences in cash rates are quite substantial.

"As our research shows, around 15% of SIPP portfolios are held in cash, and investors need to consider cash rates when they chose a SIPP. James Hay's eSIPP now offers a table topping special deposit rate as well as one of the best standard rate, without tiers or catches."

James Hay SIPP is backed by Santander, one of the largest banks in the world. James Hay has won over 22 awards for its SIPP product and service in the last six years.