SIPP interest rates on cash vary by provider and change often. Here is how SIPP cash interest works, what firms may keep and what to check.

Because rates change, none is printed here and no provider is ranked. Below is how providers describe the interest on SIPP cash, what the FCA requires of firms that keep part of it, how the cash is protected and where to read each current rate. For free, impartial guidance on your pension options, MoneyHelper runs Pension Wise, which it describes as "free, impartial and backed by government". How much cash suits your own pot depends on your circumstances, and cash, charges and the rest of a pot are easier to judge together: tell an FCA-authorised adviser what you hold by writing it into the form on this page (no cost to you).

What cash in a SIPP is, and how the interest works

Part of the money in a SIPP can sit as cash rather than being invested. How the wrapper works is covered in what a SIPP is; this page is only about the cash.

The two providers quoted here hold SIPP cash with banks and say in their own words how much of the interest reaches you. AJ Bell says it receives interest from banks on its customers' combined cash and puts some of it "towards the interest rates we pay you, as shown in the tables above, and the rest towards keeping our account and dealing charges as low as possible". (AJ Bell, Interest rates we pay on cash, accessed 18 October 2026.) Hargreaves Lansdown says: "HL retains the difference between the interest HL receives and the interest paid to you." (Hargreaves Lansdown, Interest rates, accessed 18 October 2026.)

These are each firm's statements about its own accounts, not a description of every provider. The point is that the rate paid to you on cash can differ from what the provider's banks pay it; the FCA's client money rules, quoted below, say when a firm may keep the difference.

Timing differs too. AJ Bell says it calculates interest daily on cleared cash and pays "quarterly, in arrears", noting that "buying and selling investments affects how much cleared cash you have", so the balance earning interest can differ from the balance you see; Hargreaves Lansdown says: "Interest is calculated on the daily cleared balance and paid monthly."

What the FCA has said about firms keeping interest on cash

On 12 December 2023 the FCA wrote to investment platforms and SIPP operators, saying that they "earn interest on the cash balances they hold" for their customers. Using information firms gave it in July 2023, it found: "The majority (71%) of our 42 sampled firms retain at least some of the interest they earn on customers’ cash balances, between a range of 10% to 100%. On average they retain 50% of it." (FCA, Dear CEO letter on the retention of interest earned on customers' cash balances.) The two most common reasons firms gave were "to cover the costs of managing cash, or to discourage long-term allocations of cash in platform accounts".

It then set out its concerns and expectations, including:

  • "Retention of interest by firms is generally not providing fair value to consumers".
  • Where a firm says it keeps interest to cover the cost of managing cash, "our expectation is that firms ensure the amount retained is reasonable in light of the actual costs of providing this service".
  • Firms should "Cease the practice of double-dipping", which the letter defines as firms that "both retain interest and take an account charge or fee on customers’ cash".

Firms were told to make any changes by 29 February 2024, and the FCA's press release said firms "have been told to cease" double dipping. The percentages above describe firms' practice in mid-2023, before those changes were due, and the letter sets out what the FCA expects rather than judging any one firm.

The rule in the FCA Handbook now

The FCA's client money rules now say: "A firm must pay a retail client any interest earned on client money held for that client unless: (1) it has otherwise notified them in writing; and (2) not paying the client all or some of the interest is compatible with the Consumer Duty." (FCA Handbook, CASS 7.11.32R, text dated 25 September 2026.) The accompanying guidance adds that a firm "may, under the terms of its agreement with the client, pay some, none, or all interest earned". So keeping interest needs both written notice and compatibility with the Consumer Duty; telling the client alone is not enough.

The reason, given in the FCA's December 2025 consultation: "merely notifying a retail client may not be sufficient to meet the Duty", because firms "must ensure that retail clients understand the implications of interest retention and that the arrangement delivers fair value". (FCA, CP25/37.) That proposal is now the rule: the FCA confirmed it in Handbook Notice 142 in June 2026.

For some SIPPs a further rule is proposed. The FCA's June 2026 consultation on SIPPs sets out a new regime for firms that hold pension scheme money "where they use unauthorised trustees", noting that such interest is in some cases "retained to cover the operational costs of managing cash". Its draft rule would require interest on "directly held scheme money" (money in pension scheme bank accounts in the unauthorised trustee's name) to go to the individual pot unless the operator has agreed otherwise in writing and keeping it is compatible with the Consumer Duty. Comments closed on 24 August 2026, and the FCA says it will "issue a Policy Statement once we have reviewed your comments", so for now this is a proposal. (FCA, CP26/20.)

What to check before you rely on a cash rate

A rate on its own tells you little. These questions follow from what the providers and the FCA say above; the answers are in each provider's own documents.

  1. The current rate, and the date it applies from. Each provider publishes its own SIPP cash rates: AJ Bell and Hargreaves Lansdown are examples of where to look, not a shortlist, and each shows the date its current rates took effect. AJ Bell says: "We usually change our rates from time to time." For other firms, look on their own rates and charges pages; our guides to Vanguard, Interactive Investor, Hargreaves Lansdown, Aviva and Scottish Widows cover their charges.
  2. Whether the firm keeps part of the interest, and what it says it is for. AJ Bell and Hargreaves Lansdown each say so, as quoted above. The FCA's letter expects a firm's approach to be "clearly and accurately reflected in the product documentation", and the Handbook rule turns on what the client has been told in writing.
  3. Whether a charge applies to cash as well. The letter describes charging a fee on cash while also keeping interest as "double dipping", so check the charges page as well as the rates page. Our guide to pension charges explains the other charges a pot can carry.
  4. Whether the rate is tiered. AJ Bell, for example, applies different rates to different slices of a balance, so a headline rate may apply to only part of your cash.
  5. How and where the cash is held. Hargreaves Lansdown says its "Client bank accounts are designated trust accounts and segregated from our own funds"; AJ Bell says: "We hold your cash with a range of carefully selected banks".
  6. How much of it is protected if a bank fails. See the next section.

Rates in the SIPP can also differ from the same provider's other accounts, and from one stage to another: AJ Bell says that once you start drawdown "you'll receive the drawdown interest rates on all of the cash held in your SIPP", and Hargreaves Lansdown says "The rates we pay clients are determined by the nature of the account and how that account is typically used". If you expect to hold cash for income, see choosing a drawdown provider and how drawdown works.

Which of these matters most depends on how much cash you hold and for how long. For an FCA-authorised adviser to look at your SIPP cash alongside your other pensions and savings, jot your balances into the form on this page, mentioning cash interest.

How the cash is protected

The FSCS, the compensation scheme, says: "If you hold money with a UK-authorised bank, building society or credit union that fails, we’ll automatically compensate you up to £120,000 per eligible person, per bank, building society or credit union. On 1 December 2025 the deposit limit rose to £120,000." (FSCS, banks, building societies and credit unions.) Banks that share a licence count as one: "If you have money in multiple accounts with multiple banks that are part of the same banking group (and share a banking licence) we have to treat them as one bank."

For SIPP money held in a bank account, the FSCS's question-and-answer page for banks applies the same limit. For an account "held for a bare trust, personal pension, SIPP, money purchase SSAS/money purchase or defined contribution OPS/client/pooled account", it says: "FSCS protects eligible beneficiaries up to £120,000 for each beneficiary of the type across all accounts held in the bank/banking group." Your own savings at the same bank or group can count towards that limit: a beneficiary with an account of their own there is "only protected up to £120,000 in total". For money held through a platform, eligibility "would be dependent on how the funds are held with the bank" and the FSCS "wouldn’t be able to confirm eligibility of specific deposits until the point of the firm failing". (FSCS, Deposit protection Q&As.) So it is worth asking your provider which banks hold its clients' cash and how its accounts are set up.

That is cover if a bank fails. If the SIPP operator itself fails, the FSCS says that for SIPPs, where it can pay, it "will normally cover the pension at 100% with an upper cap of £85,000": a separate protection, explained in the SIPP guide.

Money market funds: not the same as cash

If a provider offers a money market fund alongside cash, it is a different thing. In a December 2023 consultation the FCA described money market funds as "considered to be low-risk investments that give investors a way to diversify credit risk and a place to hold their assets, while aiming to yield a return in line with short-term money market rates", and added: "Investments in an MMF are, however, not guaranteed." (FCA, CP23/28, paragraphs 1.4 and 1.5.)

A fund is an investment, not a deposit with a bank. Its value can fall as well as rise, and you may get back less than you put in; MoneyHelper says of SIPP investments in general, "All investments can rise and fall, so there’s always a risk you could get back less than you pay in." Which money market funds a provider offers is for its own fund list, and pension charges explains the costs to look for.

SIPP cash interest: questions people ask

Do SIPPs pay interest on cash?

Some providers publish a rate for cash in their SIPP; AJ Bell and Hargreaves Lansdown each do, on the pages linked above. How much of what the bank pays the provider reaches you is set by each provider's terms, within the FCA rule quoted above.

Which SIPP pays the best interest on cash?

Each provider sets its own rate and changes it, so no ranking would stay accurate. Compare each provider's current rate against the checklist above (what the firm keeps, tiers, any charge on cash, how the cash is held), and see choosing a SIPP provider or choosing the best pension for the wider comparison.

Is the interest on SIPP cash taxed?

AJ Bell says: "Interest you earn in ISAs and SIPPs is free from UK income tax." Hargreaves Lansdown says: "Interest in all ISA and SIPP accounts is paid free from UK income tax." Both are those firms' descriptions of their own accounts.

What interest does cash in an Aviva or Scottish Widows pension earn?

Ask the provider or read the plan's documents: whether the cash is held as a deposit or in a cash fund, what it earns and what charges apply. Our pages on Aviva pension charges and Scottish Widows pension fees start with the charges.

Is cash in my SIPP covered by the FSCS?

The FSCS says money in a bank account held for a SIPP is protected up to £120,000 per eligible beneficiary across that bank or banking group, and your own savings there can count towards the same limit, though eligibility depends on how the funds are held. If the SIPP operator fails, the separate £85,000 cap described above applies.

Your next step

The value of investments in a SIPP can fall as well as rise, and you may get back less than was paid in; cash is one of the choices, not the only one. Pension Wise remains a free route. Prefer a professional to weigh cash against your tax and your plans? Requesting a phone call from an FCA-authorised adviser takes the form on this page.

Sources: FCA, Dear CEO letter (12 December 2023) and press release; FCA Handbook, CASS 7.11; FCA, CP25/37 and Handbook Notice 142, CP26/20 and CP23/28; FSCS, banks, deposit protection Q&As and pension protection pages; MoneyHelper, SIPPs explained (archived copy); AJ Bell and Hargreaves Lansdown interest rate pages; all accessed 18 October 2026.