HL SIPP holding cash

[MrOrange]

I pay a regular payment into my H&L SIPP. It drops onto the "cash" account until I manually decide which fund I'm going to transfer it into (yes, I know you can automate it but I want to keep my funds "balanced".

This year has been a bit grim - dropping £2k in month and seeing the total SIPP grow by quite a bit less than that. I notice that HL also pay 0.4% on cash balances so my questions are:

1. Can I simply leave the payment in "cash" in my SIPP? (I assume so) and earn a paltry 0.4%
2. Would I still get the automatic 20% tax-rebate that follows a few months later, and can I claim back my extra 20% (high tax payer) come the end of the year?
3. Is this a relatively "wise/sensible" thing to do - the theory here is that at least the cash doesn't de-value (ignoring inflation) and when the market starts to return to (old) normal I could tx the funds into my chosen fund?

[Phooey]

Obviously I take it you need HL for specific funds but I read somewhere that Vanguard offer approx 2% on cash. So 0.4% is a bit crap.

[FriedMarsBar]

I would think that the answer is yes you'll get the 20% at source and can claim back higher rate tax as the money (cash or not) is in a pension, you're not free to withdraw it.

[bitchstewie]

Phooey said:

Obviously I take it you need HL for specific funds but I read somewhere that Vanguard offer approx 2% on cash. So 0.4% is a bit crap.

They do offer 2% I confirmed it with them.

I assume it's tied to the BoE base rate but sadly they don't publish the rate anywhere you have to ask them.

[timberman]

bhstewie said:

Phooey said:

Obviously I take it you need HL for specific funds but I read somewhere that Vanguard offer approx 2% on cash. So 0.4% is a bit crap.

They do offer 2% I confirmed it with them.

I assume it's tied to the BoE base rate but sadly they don't publish the rate anywhere you have to ask them.

I can confirm it too,

it's what I get paid on any cash I hold, paid into my account on the 1st of every month

[oldaudi]

Could you use their active savings accounts which seem to offer more interest , then move it to the SIPP when you want to buy a fund? You’ll get the 20% back when it’s moved into the sipp and the claim the rest via your tax return if higher tax bracket.

I’ve been keeping money in several active savings funds the last 6 months and, got more interest than the cash in the sipp and the put it into my sipp when I want to buy something

Edited by oldaudi on Tuesday 11th October 21:19

[MrOrange]

oldaudi said:

Could you use their active savings accounts which seem to offer more interest , then move it to the SIPP when you want to buy a fund? You’ll get the 20% back when it’s moved into the sipp and the claim the rest via your tax return if higher tax bracket.

I’ve been keeping money in several active savings funds the last 6 months and, got more interest than the cash in the sipp and the put it into my sipp when I want to buy something

Edited by oldaudi on Tuesday 11th October 21:19

That’s not a bad idea. Cheers all

[Phooey]

timberman said:

bhstewie said:

Phooey said:

Obviously I take it you need HL for specific funds but I read somewhere that Vanguard offer approx 2% on cash. So 0.4% is a bit crap.

They do offer 2% I confirmed it with them.

I assume it's tied to the BoE base rate but sadly they don't publish the rate anywhere you have to ask them.

I can confirm it too,

it's what I get paid on any cash I hold, paid into my account on the 1st of every month

I'm still not sure exactly where in your Vanguard acc it says how much (%) they pay on cash, but I suspect it won't be quite as much as 2% net of platform fees 0.15% and 0.20%?

[softtop]

on a slight tangent, will the money ever get in vested unless you make an additional investment? Mine are automated. Will they then charge you about £12 for the privilege?

[Jiebo]

I get about 1.4% with vanguard investor. I have about £20k in cash within my ISA, not SIPP.

It’s not 2%, unless cash in the SIPP gets you more interest.

[bitchstewie]

They told me this week it’s 2% but not absolutely clear if that pre or post fees.

That’s in an ISA.

Main thing is it’s not a bad rate for spare cash that can instantly be deployed IMO.

[Jiebo]

bhstewie said:

They told me this week it’s 2% but not absolutely clear if that pre or post fees.

That’s in an ISA.

Main thing is it’s not a bad rate for spare cash that can instantly be deployed IMO.

Its somewhere between 1.4% and 1.6%. This is the monthly return from around £20k.

It’s certainly not the worst considering it’s not a cash ISA account. These have got to 2.25% for easy access though so perhaps not worth leaving cash in Vanguard long term.

[bitchstewie]

Hmm this is what they told me this week.

Vanguard said:

Hi xxx,

I hope you are well.

With the Bank of England rate at 2.25%, Vanguard does currently pay 2% interest on cash held, this accrues daily and is paid monthly to your Vanguard account in arrears.

You will be able to see any interest under 'Transactions' > 'Cash statement'.

Please note that all holdings in your Vanguard account are subject to our 0.15% account fee, and this includes any cash that you hold. The account fee is calculated daily and charged quarterly.

We do not currently publish the rate that we pay for cash interest, however you can always reach out to us and we will be happy to confirm this for you!

I hope this helps, have a great day.

Kind regards,

[Jiebo]

bhstewie said:

Hmm this is what they told me this week.

Vanguard said:

Hi xxx,

I hope you are well.

With the Bank of England rate at 2.25%, Vanguard does currently pay 2% interest on cash held, this accrues daily and is paid monthly to your Vanguard account in arrears.

You will be able to see any interest under 'Transactions' > 'Cash statement'.

Please note that all holdings in your Vanguard account are subject to our 0.15% account fee, and this includes any cash that you hold. The account fee is calculated daily and charged quarterly.

We do not currently publish the rate that we pay for cash interest, however you can always reach out to us and we will be happy to confirm this for you!

I hope this helps, have a great day.

Kind regards,

Guessing here, but maybe it's been increased recently, the statements I have would be from last month. Only will know for sure in November what they gave in October. If its 2%, its very decent.
Quite strange they don't advertise it, if it's 2% it beats most cash ISAs right now.

[Phooey]

Bit of a thread resurrection..

https://monevator.com/vanguard-cash-interest/

"Better known as a global investment giant, Vanguard is currently paying a highly competitive interest rate on cash parked in its ISA, SIPP, and general trading account products. Vanguard doesn’t publicise it but you can currently earn a Vanguard cash interest rate of 3.0935% to 3.1% on money you leave uninvested in its platform."

[Crumpet]

Phooey said:

Bit of a thread resurrection..

https://monevator.com/vanguard-cash-interest/

"Better known as a global investment giant, Vanguard is currently paying a highly competitive interest rate on cash parked in its ISA, SIPP, and general trading account products. Vanguard doesn’t publicise it but you can currently earn a Vanguard cash interest rate of 3.0935% to 3.1% on money you leave uninvested in its platform."

Interesting. My workplace pension is with HL and I’ve got a sizeable chunk held as cash but obviously not earning much. Is it possible to transfer pensions between providers or does that complicate things with my employer?

[timberman]

I posted this on another thread,



sent to me recently after I made a withdrawal

[WayOutWest]

Over 3% on cash is not bad when you consider 10 year gilts only yield 3.3%, and most people will be holding them in a fund that charges at least 0.3% TER anyway.