Bank accounts
Any payments made into your James Hay product are received into a pooled bank account, held in the name of the trustee (for SIPP products), or in the name of the provider (for ISA, GIA and Wrap products, excluding the Wrap SIPP). Please see your product terms and conditions for confirmation of the trustee/provider.
These accounts hold money for other clients, and your product's cash holdings will be recorded separately in our records but not in the banks’ records. Your cash within the pooled bank account is known as your product bank account, and your balance is visible to you at any time via your James Hay Online account.
We will 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 your financial protection can be found here.
Our approach to cash interest
Customers can hold cash balances on the platform to help pay adviser service fees and charges, or to act as a temporary haven when the markets are volatile. This facility isn’t designed to hold large balances of cash for long periods of time.
Our active management of customer cash means we can credit our customers with a competitive rate of interest on cash in their product banks accounts. We retain some of what’s earned so we can keep our charges low, as well as investing in our technology, propositions and in providing higher service levels. Our aim is to deliver excellent financial outcomes for you, and ultimately help make your retirement more rewarding.
The tables below show how we share the interest generated on cash with you:
| Earned interest rate (per tier) | % of earned interest rate paid to customers (per tier) |
|---|---|
| 0.00% - 1.00% | No interest paid |
| Above 1.00% | 50% of interest paid above the 1% retained |
| Month | % interest earned | % interest paid |
|---|---|---|
| October 2024 | 5.52% | 2.26% |
| November 2024 | 5.39% | 2.20% |
| December 2024 | 5.33% | 2.16% |
| January 2025 | 5.31% | 2.16% |
| February 2025 | 5.29% | 2.15% |
| March 2025 | 5.18% | 2.09% |
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 you to earn more.
If you’d like to know more about interest earned/previously retained over the last year, feel free to contact us.
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 (our Cash Panel provider, offering a range of term deposits and notice accounts across many banks), NS&I assets, money market funds, lower risk rate model portfolios and/or gilts and bonds purchased through a stockbroker.
Below are some commonly asked questions and answers in relation to the product bank accounts.
Your product bank account represents your cash holding for each of your James Hay products. This money is held in a pooled bank account in the name of the trustees for SIPP products, or in the name of the provider for ISA, GIA, and Wrap products (excluding Wrap SIPP).
This pooled bank account also holds money for other clients, and your product's holdings are recorded separately in our records but not in the banks’ records.
Your product bank account is designed to facilitate the movement of money within your James Hay product, including contributions and subscriptions, transfers in and out, investment purchases and sales, as well as for the payment of any withdrawals.
Any charges you incur are also normally paid from the product bank account, including James Hay's 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 in fixed term deposit accounts from our SIPP Cash Panel are covered separately by the FSCS, but this limit does include any personal or joint accounts you hold with banks outside of your James Hay products.
Please also note that cash held in the Wrap Offshore Bond is not covered by FSCS protection, as the product falls under the Isle of Man Compensation of Policyholders scheme.
If we are using more than one bank, we may spread the cash held in your product across multiple banks in order to increase the potential FSCS protection for your money. If a single bank holds more than £85,000 of your money, we will hold this with our highest rated banking providers wherever possible.
What are the minimum requirements for banks that can hold more than £85,000 of an individual's cash?
For cash held in the Wrap (excluding Wrap SIPP), Modular ISA, and Modular GIA:
If a bank is unable to pay us back all the client 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 client, the FSCS would cover the shortfall amount.
For cash held in SIPP products, for example the Modular iSIPP, iSIPP and Wrap SIPP:
Pooled cash is spread across customers in the same proportion, except where this would cause the balances held by a customer to exceed £85,000 with a bank not approved by us for that purpose. In these circumstances the amount allocated to that customer for that bank would be capped at £85,000. In the event that a bank is unable to pay us back all the money we hold with them, the shortfall would be shared across all customers in proportion to the cash they hold with that bank. Please note that in practice, if the shortfall is less than £85,000 per client, the FSCS would cover the shortfall amount.
The product bank account is designed for holding cash for short periods of time, while your investments are being made or withdrawals are being paid, and so it not considered to be a long term investment option.
There is no minimum balance to be held within your product bank accounts, however you and your financial adviser should regularly review this to ensure that there are sufficient funds available for investments, charges and withdrawals as required.
Having insufficient funds available at the time may prevent us from being able to provide these services to you without delay. Your balance and bank account details can be viewed at any time within your James Hay Online account.