Sipps savers losing £579m a year
Those investing for their retirement by paying into self invested personal pensions (Sipps) may be losing £589 million collectively every year, according to new research.
This translates to investors with the average balance of £46,500 missing out on an estimated £1,930 annually.
Poor-paying cash accounts are to blame for the losses, research from James Hay has indicated.
Investors with Sipps are moving segments of their portfolios into cash – sometimes making up over 35 per cent of a Sipp account, the study shows.
Given the present economic environment, James Hay has warned money may not have been invested fully, thus leaving funds sitting in cash.
Furthermore, people saving for their retirement should be aware that providers offer varying rates of interest.
Propositions and e-commerce manager at the company Chris Smeaton said: "Cash rates are now becoming a key focus in Sipps as investors increasingly asset allocate to the safer havens of cash. In a lower return environment, these differences in cash rates are quite substantial."
In other news, Fool.co.uk cited Annuity Direct's figures stating annuity rates have increased 12 per cent due to the credit crunch.
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