13% of pension administrators say cash allocation has increased by 26% to 50%1. The Investec Pension and Trust Reserve Account currently pays up to 3.00%2 gross AER3.
New research1 from Investec Private Bank (‘Investec’) reveals that over the past 12 months the majority (55%) of pension administrators surveyed said that their clients increased the cash allocation of their Self Invested Personal Pension (SIPP). Nearly a quarter (23%) said that they had typically witnessed an increase of up to 25% amongst their clients. However, a further 13% of pension administrators reported an increase in the amount allocated to the cash element of their clients’ SIPPs of between 26% and 50%.
Investec’s research reveals that while 39% of pension administrators believe their clients tend to have less than £100,000 in the cash portion of their SIPP, 13% have between £100,000 and £250,000. Around 3% have between £500,001 and £1million in cash.
Despite the size of the deposits, over a quarter (29%) of pension administrators surveyed stated that their clients receive on average less than 1% on the cash element of their SIPPs. Only 13% said that their clients’ money earns over 2% interest.
Lionel Ross of Investec Private Bank said: “There are significant differences in the rate of interest paid on cash held in a SIPP account and the rate on most accounts will have changed significantly in the past 18 months. It’s crucial, therefore, that those responsible for administrating them check that these accounts are paying a competitive rate.”
David Salmon, from Whiting and Partners Wealth Management, commented: “It is completely understandable that schemes would wish to adopt a more defensive stance during periods of volatility & uncertainty although this does not mean that they have to accept almost non-existent rates on their cash deposits. A little effort can often achieve significant improvements.”
The Investec Pension and Trust Reserve Account provides attractive cash rates for SIPP and SSAS bank accounts4.
Investec Pension and Trust Reserve Account offers the following rates for balances:
£500,000 + 3%2 gross AER3
£100,000 - £499,999 2.5%2 gross AER3
£25,000 - £99,999 2.0%2 gross AER3
One month notice is required to access cash and the account is supported by an efficient and client focused service. A minimum balance of £25,000 is required, and interest is calculated daily and credited to the account on a monthly or annual basis.
For more information, please call 020 7597 4012 or visit www.investecprivatebank.co.uk
Notes to editors:
1 Research conducted by Investec Private Bank amongst 31 pension administrators at an industry event on 30 June 2009.
2 The rate is subject to variation and correct as at 18 August 2009
3 AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. Gross is the interest rate paid before the deduction of tax.
4 Business Moneyfacts, May 2009.
