Bank accounts
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 invest in our technology and propositions and provide higher service levels. Our aim is to deliver excellent financial outcomes for our customers, and ultimately help make your retirement more rewarding.
Details on our sharing policy are displayed below, along with the actual rates applied to customer accounts.
The amount of interest we share with customers will be determined by the Bank of England Bank Rate and the annualised rate of interest achieved by Nucleus. We update and disclose this figure at the start of each month.
How much interest we share
A change in Bank Rate directly affects the amount of interest available which we may apply to any cash that customers hold in their product bank account. This means that the interest your clients 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 your clients plan.
The rate of interest earned by Nucleus will be updated each month.
The following table shows the Bank of England Bank Rate, interest rate earned by Nucleus and interest shared with customers that are part of the exclusive preview of our new Nucleus Platform:
| Month | Bank of England rate | % interest earned | % interest paid |
|---|---|---|---|
| Oct 2024 - Feb 2025 | 4.66% | 1.83% | |
| Mar-May 2025 | 4.50% | 4.26% | 1.63% |
| Jul 2025 | 4.25% | 4.01% | 1.51% |
| Aug 2025 | 4.25% | 4.01% | 2.08% |
| Sep 2025 | 4.00% | 3.76% | 1.88% |
Note: Cash interest shared up to the end of July 2025 was based on our James Hay policy. From 1 August the policy outlined above applies.
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 should be able to pay to your clients’ plans.
The tier levels are set by Nucleus and are subject to change without notice.
Tiered interest rate - Worked example
If the balance of a customers’ bank account is £10,000 for a 12-month period, the Bank Rate is 4.25% and the annualised rate of interest earned by Nucleus is 4.01%; 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% | (0.50/4.25) x 0% x 4.01% x £10,000 = £0.00 per year |
| 0.51% – 1.00% | 40% | (0.50/4.25) x 40% x 4.01% x £10,000 = £18.87 per year |
| 1.01% – 2.00% | 50% | (1.00/4.25) x 50% x 4.01% x £10,000 = £47.18 per year |
| 2.01% – 3.00% | 60% | (1.00/4.25) x 60% x 4.01% x £10,000 = £56.61 per year |
| 3.01% – 4.00% | 70% | (1.00/4.25) x 70% x 4.01% x £10,000 = £66.05 per year |
| 4.01% – 5.00% | 80% | (0.25/4.25) x 80% x 4.01% x £10,000 = £18.87 per year |
| 5.01% + | 90% | (0.00/4.25) x 90% x 4.01% x £10,000 = £0.00 per year |
| Total | This will give the plan a total annual interest of £207.58 with an effective rate of interest of 2.08% |
Typically, should there be changes to interest rates the Treasury team will use its market knowledge to negotiate the best rates offered at the time, which may allow your clients to earn more.
We only use banks which are authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and Prudential Regulation Authority, and are covered by the Financial Services Compensation Scheme (FSCS). More details on financial protection for your clients can be found at fscs.org.uk.
- Each bank must:
- have a UK banking licence
- be authorised by the Prudential Regulation Authority
- be regulated by the Financial Conduct Authority and the Prudential Regulation Authority
- As well as credit ratings, our due diligence covers several metrics which are a combination of quantitative metrics, derived from financial statements, and qualitive metrics gained from media monitoring and service reviews. We also consider the environmental, social and governance (ESG) credentials of the banks we select.
- We perform daily liquidity monitoring which, coupled with cashflow modelling, helps ensure we have sufficient cashflow to meet your client’s needs.
Several alternatives are available for those seeking investment-style returns on their spare cash, in some instances by locking into longer-term cash products. These include Bondsmith, an FCA approved third party provider that offers a range of term deposit accounts across several banks, NS&I assets, money market funds, lower risk rate model portfolios and/or gilts and bonds purchased through an investment manager/ stockbroker.
Below are some commonly asked questions and answers in relation to product bank accounts.
The product bank account represents each customer’s cash holding for their Nucleus products. This money is held in a pooled bank account in the name of the trustees for SIPP products, in the name of the provider for ISA and GIA, and in the name of RL360 for the Offshore Bond.
This pooled bank account also holds money for other customers, and each customers holdings are recorded separately in our records but not in the banks’ records.
The product bank accounts are designed to facilitate the movement of money within Nucleus products, including contributions and subscriptions, transfers in and out, investment purchases and sales, as well as for the payment of any withdrawals.
Any charges incurred are also normally paid from the product bank account, including Nucleus’ charges as well as those due to investment managers, fund providers, financial advisers and other third parties as required.
The Financial Services Compensation Scheme (FSCS) protection limit (currently £85,000) applies separately to each bank we use, to protect your money in the unlikely event of the failure of the bank. Please note that money held by customers in fixed term deposit or notice accounts from our SIPP and GIA Cash Panel are covered separately by the FSCS, but this limit does include any personal or joint accounts customers hold with banks outside of their Nucleus products.
Please also note that cash held in the Offshore Bond product bank account is held in the name of RL360. As RL360 are a corporate client they are unlikely to be eligible for compensation in any jurisdiction.
If we’re using more than one bank, we may spread the cash held in your products across multiple banks in order to maximise the interest return and increase the potential level of FSCS protection.
We’ll only select banks rated by leading ratings agencies in the ‘BBB’ category or higher for this purpose. Please note that we may change this minimum rating from time to time depending on the economic circumstances.
If a bank is unable to pay us back all the customer money we hold with them (so there is a shortfall) we have to share that shortfall across all of our customers for whom we are holding client money. If 10% of our pooled cash were with a particular bank and that bank could only repay half of this amount, then each customer would have a potential shortfall of 5% of their cash balance. Please note that in practice, if the shortfall is less than £85,000 per customer, the FSCS would cover the shortfall amount. This applies for cash across our SIPP, ISA and GIA products, although SIPP funds are kept separate from those that sit within a GIA or ISA.
The product bank account is designed for holding cash for short periods of time, while investments are being made or withdrawals are being paid, and so it’s not considered to be a long-term investment option.
There’s no minimum balance to be held within the product bank accounts, however you should regularly review this to ensure that there are sufficient funds available for investments, charges and withdrawals as required.
If insufficient cash is available to pay fees and charges, automated proportional disinvestment will take place where possible to help cover them. For income or withdrawals, you’ll be asked to specify which assets you’d like to use (this can be cash).