Bank Interest for SIPPs and SSASs

How we share bank interest

Our active management of customer cash means we can credit our customers with a competitive rate of interest. We retain some of what’s earned so we can keep our charges low, as well as investing in our technology and propositions and in providing higher service levels. Our aim is to deliver excellent financial outcomes for our customers, and ultimately help make their retirement more rewarding. Details on our sharing policy are displayed online below along with the actual rates applied to customer accounts, and the level of cash interest rates retained is shown on client illustrations.

For customers with SIPPS that have Barclays Pooled Bank Accounts

Most of our Talbot & Muir SIPP and Simple Retirement Account customers will have a Barclays Pooled Bank Account. The amount of interest we share with customers will be determined by the Bank Rate and the annualised rate of interest achieved by Talbot and Muir. We update and disclose this figure at the start of each calendar quarter.

The Bank of England Bank Rate as at 1 April 2024 was 5.25%.

Annualised gross interest rate earned in the quarter 1 December 2023 to 29 February 2024 was 5.59%.

The effective rate of interest that we will share with customers from 1 April 2024 will be 3.22%.

Quarter beginning Bank of England bank rate % Interest earned % Interest shared
2024 Q1 (from 08 March) 5.25% 5.44% 3.13%
2024 Q2 5.25% 5.59% 3.22%

For more information on how we calculate the rate of interest we share, please see our FAQs for customers with ‘tiered’ interest rates below.

Applicable bank accounts were transferred to Barclays on 8 March 2024. For rates we shared prior to the transfer, please see the rates for Metro Bank below.

For clients who have accounts with The Pension Partnership, your bank account will transfer to Barclays soon. We will let you know when this is going to happen. Before that happens please see your rates below in the section for customers that have SIPPS or SSASs with Metro Bank accounts.

For customers that have SIPP or SSASs with Metro Bank accounts

Some of our SIPP customers, including those who have an Elite Retirement Account or The Pension Partnership account, will have a Metro Bank account. Any SIPP that has joint trustees will typically have a Metro Bank account. Metro bank accounts are also the default option for our SSAS products, although the trustees of the SSAS are free to choose other providers that may offer different rates.

We may receive variable interest from our principal banking partner – an annual estimate is shown on your latest personal illustration. The amount of interest we share with you will be determined by the current rate of interest received from our principal banking partner. When the rate we receive from our principal banking partner is 1.50% or above, we will share 1/3rd of the whole amount with you, rounded to the nearest 0.05%. and nothing if the rate is below this. We will update and disclose this figure each time our principal banking partner updates the interest rate they give us.

Current gross interest rate earned since 1 November 2023 is 3.20%

The effective interest rate we will share with you from 1 November 2023 will be 1.10%

The following table shows the total interest rate earned by us and the interest shared with you:

Beginning % Interest earned % Interest shared
1 January 2022 0.25% 0.00%
1 April 2022 0.35% 0.00%
1 May 2022 0.45% 0.00%
1 June 2022 0.65% 0.00%
1 August 2022 0.85 0.00%
1 October 2022 1.20% 0.00%
1 November 2022 1.45% 0.00%
1 January 2023 1.80% 0.60%
1 February 2023 2.00% 0.65%
1 March 2023 2.25% 0.75%
1 May 2023 2.40% 0.80%
1 June 2023 2.55% 0.85%
1 August 2023 2.80% 0.95%
1 September 2023 2.90% 1.00%
1 November 2023 3.20% 1.10%

 

FAQs for customers with ‘tiered’ interest rates

 

What does a Bank Rate change mean for our customers?

A change in Bank Rate directly affects the amount of interest available which we may apply to any cash that customers hold in their SIPP bank account. This means that the interest customers receive is not guaranteed to stay the same and is likely to change if the Bank Rate changes. It can go up or down.

The interest rates payable to customers’ plans operate on a tiered basis, which means that the higher the Bank Rate, the greater the proportion of interest we pay to their plan.

The rate of interest earned by Talbot and Muir will be updated each quarter.

The following table shows the Bank of England Bank Rate, interest rate earned by Talbot and Muir and interest shared with customers:

Quarter beginning Bank of England Bank Rate % Interest earned % Interest shared
2024 Q1 (from 8 March) 5.25% 5.44% 3.13%
2024 Q2 5.25% 5.59% 3.22%
What is a tiered interest rate and what does it mean for our customers?

The interest rates payable to our customers’ plans, explained in the table above, operate on a tiered basis. The tiered system we apply means that the higher the Bank Rate, the greater the proportion of interest we pay to customers’ plans.

The rate of interest earned by Talbot and Muir will be updated each quarter. The tier levels are set by Talbot and Muir and are subject to change without notice.

Tiered interest rate – Worked example

If the balance of a customer’s bank account is £10,000 for a 12 month period, the Bank Rate is 5.25% and the annualised rate of interest earned by Talbot and Muir is 5.59%; the plan will receive interest on each tier as follows:

Bank of England Bank Rate tier Proportion of interest paid to your plan Amount of interest paid to your plan
0.5% or below 0% (0.50/5.25) x 0% x 5.59% x £10,000 = £0.00 per year
0.51% – 1.00% 40% (0.50/5.25) x 40% x 5.59% x £10,000 = £21.30 per year
1.01% – 2.00% 50% (1.00/5.25) x 50% x 5.59% x £10,000 = £53.24 per year
2.01% – 3.00% 60% (1.00/5.25) x 60% x 5.59% x £10,000 = £63.89 per year
3.01% – 4.00% 70% (1.00/5.25) x 70% x 5.59% x £10,000 = £74.53 per year
4.01% – 5.00% 80% (1.00/5.25) x 80% x 5.59% x £10,000 = £85.18 per year
5.01% + 90% (0.25/5.25) x 90% x 5.59% x £10,000 = £23.96 per year
Total £322.10 per year

This will give the plan a total annual interest of £322.10 with an effective rate of interest of 3.22%.

What does a bank rate change mean for our customers?

A change in Bank Rate directly affects the amount of interest available which we may pay to customers’ plans. The Bank of England Bank Rate at the start of each calendar quarter will determine how much interest will be applied to any cash that a customer holds in their SIPP bank account. This means that the interest they receive is not guaranteed to stay the same and is likely to change if the Bank Rate changes. It can go up or down.

The impact of changes in the Bank Rate is shown in the table below and this will be applied to the annualised rate of interest achieved by Talbot and Muir:

Bank of England Rate Proportion of interest paid to your plan
0.5% or below 0%
0.51% – 1.00% 40%
1.01% – 2.00% 50%
2.01% – 3.00% 60%
3.01% – 4.00% 70%
4.01% – 5.00% 80%
5.01% or above 90%
What happens in the event of a negative Bank of England Bank Rate?

In the extraordinary event that the Bank Rate drops below zero, no interest will be paid to customers’ plans. Talbot and Muir reserve the right to recoup any costs associated with operating the SIPP bank account under our product specific Terms and Conditions for customers’ plans. We will inform our customers of any charges, giving them as much notice as reasonably possible, which will generally be at least 30 days in line with the product specific Terms and Conditions of their plan.

What is UK’s Bank Rate?

The Bank of England’s Monetary Policy Committee is responsible for setting the UK’s Bank Rate. The Bank Rate determines the rate of interest that the Bank of England pays to commercial banks that deposit money with them. It influences the rates those banks charge people to borrow money or pay on their savings. If the Bank Rate changes, the interest rates that apply to financial products can change too as the cost of providing some products is strongly influenced by the Bank Rate.

Which products is this information relevant for?

The information on this page is applicable to most Talbot and Muir products, with more detail for specific products detailed below. Clients can also refer to their illustrations for specific information on their plan.

Most of our Talbot & Muir SIPP customers, including Simple Retirement Account customers will have a Barclays Pooled Bank Account.

Some of our SIPP customers, including those who have an Elite Retirement Account, will have a Metro Bank account. Any SIPP that has joint trustees will typically have a Metro Bank account.

Metro bank accounts are also the default option for our SSAS products, although the trustees of the SSAS are free to choose other providers that may offer different rates.