New research from Investec Private Bank reveals that many UK investors with SIPPs are receiving derisory returns on the cash they hold held ...

New research from Investec Private Bank reveals that many UK investors with SIPPs are receiving derisory returns on the cash they hold held in these wrappers. Investec’s analysis of 37 SIPPs reveals that the average return on cash balances of £1,000 ($1,840) is only 3.08 per cent gross AER. For balances of this size, 40.5 per cent are paying less than 3 per cent interest, and 5.4 per cent are paying under 2 per cent. The situation is only a little better for larger balances. For example, the average return on cash balances of £25,000 held in SIPPs is 3.45 per cent Gross AER, but 18.9 per cent pay less than 3 per cent. “As much as 25 per cent of assets held in SIPPs is cash so the rate of interest this receives is very important. Sadly, our research shows that many are offering poor returns, and having a large cash balance is no guarantee of receiving a fair rate of interest,” said Linda McBain of Investec Private Bank.