Interest rates held on short-term cash deposits are expected to be subject to additional pressure due to new liquidity rules placed on banks.
This would intensify the squeeze on many self-invested personal pension (Sipp) providers, who have seen their revenue streams heavily impacted by the historically low Bank of England base rate.
“You are not likely to see any improvement on short-term deposits unless market rates improve,” said John Moret, director of sales and marketing at Suffolk Life. “Deposit rates may even get worse than they are today.”