Whether it is because of greater publicity, downward pressure on charges or their wider investment capability SIPPs have become more and more popular over recent years.

As you probably know a SIPP can invest in a wide range of different assets, some of the more popular being shares, collectives (also known as funds), deposit accounts and commercial property.

However, if you are holding cash in your SIPP and there are very good reasons why you might want to, then read on, it could be seriously damaging your wealth.

Why hold cash in a SIPP?

There are a number of reasons why a SIPP may hold cash.

Every SIPP will have a current account to handle the flow of money in, perhaps from transfers in from other pensions, new contributions, dividend payments or possibly rent.

However, there are also reasons why a SIPP may want to hold money on deposit for a longer period of time, for example:

  • The owner of the SIPP needs to use the capital in the short term, for example to buy an Annuity, and does not want to expose it to assets that may fall in value
  • To provide income payments following retirement
  • To reduce the risk that is being taken
  • Because the interest rate obtainable can meet the goals of the SIPP member and therefore additional risk does not need to be taken

So, what’s the problem?

Well, with most other types of investment in a SIPP you can shop about, get the best deal for you, and then make the decision to invest.

However, with deposit accounts in a SIPP there are two main issues:

Firstly as with say a Cash ISA, there are a huge range of deposit accounts available for a SIPP to open. However, unlike a Cash ISA there are, until now, no easy sources of information showing the best accounts available for a SIPP all in one place

Secondly many SIPPs offer access to only a restricted panel of deposit accounts. Often the interest rate is extremely uncompetitive, because the SIPP provider has an agreement with the bank or building society to cut them in on a fee or commission for allowing access to the account. This in turn reduces the interest rate for the SIPP member.

We believe that to make your money work harder, you need access to information showing the best deposit accounts available for your SIPP to invest in and for the providers to open up their plans to offer a wider range of accounts.

How can we help?

To help you in your search for the best deposit account for your needs we have launched a best buy table showing a wide range of accounts available for a SIPP to invest in.

This table can be found by clicking here and is 100% independent and unbiased, we simply want to provide you with the best possible information to help you get your money working harder for you.

The table will be updated on a regular basis and is there for you to use, free of charge, as much as you like.

We believe this table is unlike any other that is available free of charge for you to use, and we are proud to be bringing it to you.

If you are concerned that your existing SIPP is too restrictive in the accounts that it offers, our advisers can help. They can provide advice on whether your existing SIPP is suitable for your needs, the types of investments you might like to consider holding and to obtain a better return from cash.

Our advisers can be contacted on 0845 074 7778 or by emailing to info@investmentsense.co.uk