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A new way to hold cash

Date: 18 May 2021

New cash facility

If you have a Collective Retirement Account, Collective Investment Account, or ISA, you’ll have a new cash facility as part of your account. Giving you more control and flexibility, it will give you a clearer view of the flow of money coming into your account and going out (for example, if you make a withdrawal or pay a charge).

If you invest in our Collective Investment Bond, cash will be used in some instances to fund fees that you have agreed with your financial adviser or to fund Quilter’s platform charges. Cash cannot be selected as an investment within this product and no interest is paid on cash held within the bond.

Benefits of holding cash

  • Put money aside for other things
    Income and dividends can be paid into cash and this money can be used to fund fees, charges, regular withdrawals or income.
  • You’ll accrue interest daily*
    Interest is accrued daily on cleared cash and credited to your cash account once a month.
  • Access money without disinvesting
    Charges and withdrawals can be paid without you having to sell funds (if, for example, it’s not the right time in the market).

*Interest is paid gross for ISAs, Junior ISAs and Collective Retirement Accounts. Interest is subject to a basic rate income tax deduction for Collective Investment Accounts, except if you are tax-exempt, in which case interest will be paid to you gross.

Investing in cash over the long term may not achieve the best returns

Investing in cash over the long term could mean your investment doesn’t keep up with inflation and may not achieve the best returns.

Because cash interest rates are low, holding a large part of your investment in cash for a long period could mean its value doesn’t keep pace with inflation. It could also mean the value of your investment is eroded by fund, product, and advice charges.

It’s important to review your plan and fund choice regularly to ensure it continues to meet your needs. The best way to do this is with the help of a financial adviser.

 

How your charges and withdrawals are paid for

We’ll look to your cash holding first to deduct charges and on going servicing and DIM fees when, you need to pay them. If you don’t have enough (or any) money in cash, we’ll sell units proportionally across your investment funds to fund approximately six months' worth of fees, up to a maximum of 0.75% of your account value. This cash will then be held on your account to fund future fees and charges.

For your withdrawals or income, you can choose whether you want us to take the money from your cash account, or whether you want us to sell your funds (either proportionately or selectively).

 

We’ll take care of everything for you

When we move you over to the new system, if you have any money in cash deposit (for an ISA or Collective Investment Account) we will automatically move it over as cash within your account. As the Collective Retirement Account currently does not have a cash facility, no cash will be migrated for this product, however if you hold cash funds such as BlackRock cash, then these funds will be migrated along with the other funds you hold.

Next steps

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