10th April 2015
Investors in Hargreaves Lansdown’s self-invested personal pension (Sipp) will receive a cash account boost after a change of trustee.
The HL Sipp will replace Hargreaves Lansdown Pension Trustees with Hargreaves Lansdown Asset Management to enable Sipp investors to invest in a wider range of investments.
The switch will also boost the rates paid on money held in cash in the Sipp.
The company said new rules from the Financial Conduct Authority would restrict the types of fixed-term deposits that could be held in the Sipp and that changing trustees would work around these restrictions.
In a letter to Sipp holders, the broker said: ‘The change that we are making allows us to regain the ability to use a broad range of fixed-term deposits. Regaining this ability will allow us to improve the interest rates we can offer clients on cash held within the Sipp both now and in the future.’
The change will not benefit pension investors automatically as interest rates remain at their all time low of 0.5% but could help as the rate rises in future.
‘With interest rates so low, this change will not make a significant difference today. The main benefit should be seen when the interest rates start to rise, commonly expected in the early part of next year,’ said the letter.
Pension pots up to £5,000 will earn 0.05% gross, up from zero today. Up to £25,000 will remain at 0.05% and up to £10,000 will increase to 0.1% from 0.05%.
Those with over £10,000 will earn 0.2%, up from 0.1% on cash.