Latest news with #SIPPs
Daily Record
12-05-2025
- Business
- Daily Record
Investing platform offers temporary 8.5% annual interest rate on cash balances this month
Investing and trading platform IG is offering a temporary cash interest rate of 8.5 per cent AER (annual equivalent rate) - twice the current Bank of England base rate. The boosted rate will be available to people who open a stocks and shares ISA, SIPP (self-invested personal pension) or a General Investment Account (GIA) and make an initial investment before May 31. Once they have made an initial investment, any additional money that qualifying customers have deposited and are holding in cash on the account would earn 8.5 per cent interest until August 31, provided they keep any investment position open for this period. After this date, interest reverts to IG's standard 4.25 per cent rate. IG does not offer a dedicated cash savings account, so the rate would apply to uninvested cash in its ISAs, SIPPs or GIAs. IG pays interest on cash balances up to £100,000. Michael Healy, UK managing director of IG, said: 'Many investors are sitting on the sidelines right now as they wait for market clarity - this offer gives them a place to park their money and still earn a serious return.' Existing account holders could also be eligible for the offer, providing they have not yet placed their first trade and do so by May 31. The announcement was made the day after the Bank of England base rate was reduced from 4.5 per cent to 4.25 per cent, prompting suggestions that savings providers may cut their return rates. Global economic and political uncertainties, including over US tariffs, have prompted market volatility in recent weeks. Rachel Springall, a finance expert at said: 'The high interest rate looks enticing, and it is positive to see appetite to draw in savers who are looking to make their money work harder for them. However, it is essential savers carefully check the terms and conditions of the account before they invest. 'Savers need to understand that the interest rate is applied to money sitting in a specific type of account, which should entice investors who are waiting for the market storm to calm. Offering a high interest rate is a great way to entice the more risk-averse saver, and it gives them an opportunity to consider the longer-term benefits of investing in the stock market once they feel comfortable to do so. 'In the meantime, they can earn an attractive rate on their hard-earned cash, but they need to make sure they review it once the offer expires. Investing puts any capital at risk, so this option will not be suitable for every saver.' In another boost to savings rates, West Brom Building Society announced a rate increase on its Four Access Saver account on Friday. The interest rate has been increased from 4.40 per cent to 4.65 per cent AER (variable). The improved rate will apply to all new and existing customers holding issues one and two of the product, the Society said. Applications can be made online. Account holders can make up to four withdrawals per year. Sophie Dwyer, product manager at West Brom Building Society, said: 'As a mutual, our customers are at the heart of everything we do.'
Yahoo
19-04-2025
- Business
- Yahoo
Prediction: 10 years from now, £5,000 invested in a SIPP could be worth…
Leveraging the power of a Self-Invested Personal Pension (SIPP) is a fantastic way to build retirement wealth. This special type of investment account not only grants access to the stock market but also provides powerful tax advantages that can propel a portfolio much higher than a regular trading account. So with that in mind, if an investor had £5,000 today, how much money could they have in the next decade? Just like a Stocks and Shares ISA, SIPPs eliminate capital gains and dividend taxes from the equation. However, unlike an ISA, they also provide tax relief. This refund from the government depends on the income tax bracket an investor sits in. But assuming an individual is paying the 20% Basic rate, they're entitled to a 20% tax refund on all deposits made. So with £5,000 going into a SIPP (after tax relief) this capital automatically gets topped up to £6,250. With the money now in a SIPP, let's explore the potential gains. Ten years is a good chunk of time for compounding to begin working its magic. However, the amount of money ultimately depends on the average investment return an investor earns. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions. When relying on index funds, the FTSE 100 has historically offered around 8% a year, while the S&P 500's closer to 10%. For those happy with a bit more volatility and exposure to the US tech sector, the Nasdaq 100 steals the show with a 14% total gain. Return 8% 10% 14% Estimated Portfolio Value After 10 Years £13,873 £16,919 £25,140 Relying on passive index funds is a proven strategy for building long-term wealth. But this approach to the stock market does have its limits. Historical performance isn't guaranteed to continue. In fact, the FTSE 100 and FTSE 250 have both lagged their typical performance over the past 15 years, leaving investors with considerably less than expected. The same may occur for the US stock indices over the next decade. To counter this, investors can pick stocks directly. This requires a much more hands-on approach. But it also opens the door to potentially market-beating returns that pave the way for considerably greater returns during periods of lacklustre index performance. A prime example of this would be Halma (LSE:HLMA). Regardless of economic conditions, demand for health & safety products remains robust. Subsequently, the business has an impressive track record of exceeding analyst expectations – a trend that continues even in 2025. The impact of Halma's critical role in the value chain in the healthcare, environmental, and safety sectors is clear when looking at the stock price. Over the last 15 years, shareholders have reaped an impressive 16.5% annualised return, outpacing the Nasdaq and even delivering lower volatility at the same time. For reference, over 10 years, that's enough to grow a £6,250 SIPP to £32,180! Of course, it hasn't been a complete risk-free journey. Apart from trading at a fairly premium valuation today and the tight regulatory environment in which it operates, the business is highly acquisitive. Underperforming acquisitions can turn into expensive mistakes capable of compromising the balance sheet. So for investors considering this business today, these risk facts must be taken into account. The post Prediction: 10 years from now, £5,000 invested in a SIPP could be worth… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Halma Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
