Simplifying our approach to cash charges
We’re updating your Wrap terms and conditions
We are simplifying our approach to cash charges on Wrap to help make it easier to understand what you are paying for when you hold cash on the platform. We have updated your Wrap terms and conditions to reflect these changes.
Current approach to cash charges
The cash you hold on Wrap is considered a Platform Eligible Asset (PEA) along with your other investments. It currently attracts these charges:
- Platform Charge – this charge covers our platform services and is applied monthly. It is calculated as a percentage based on the amount of PEA you have on Wrap.
- Product Administration Charge – this charge is also based on the amount of PEA and is applied by the product provider of the Wrap SIPP and Wrap International Portfolio Bond for administering these products.
- Cash Management Administration Charge – this is where a portion of the interest earned on the bank accounts used to hold your cash is retained. This interest covers the costs of cash management activity, for example, market research and due diligence on bank account providers.
New simplified approach
The charges that will cover the costs for managing cash and undertaking certain platform services in respect of cash holdings will be grouped under one charge - the Cash Management Administration Charge.
Cash will no longer be considered a Platform Eligible Asset and so the Platform Charge and Product Administration Charge will not apply to cash within your cash accounts. These charges will still apply to any other investments that are considered Platform Eligible Assets but the amount used to determine the applicable charge rate will no longer include cash.
What this means
As the Cash Management Administration Charge will now cover both cash management costs and platform and product services, the interest rates paid on product level cash balances will be reduced. The new paid rates are below. The rates will continue to be calculated with reference to the Bank of England base rate. We publish the latest paid rates on our website, so you can easily view how much interest you are earning on your cash holdings.
| Current Paid Rates | New Paid Rates | ||
|---|---|---|---|
| Bank of England Base rate (per tier) | % of interest paid to customers | Base rate (per tier) | % of interest paid to customers |
| 0.00% - 0.50% | 0% | 0.00% - 1.10% | 0% |
| 0.50% - 1.00% | 30% | ||
| 1.00% - 2.00% | 50% | 1.10% - 2.00% | 50% |
| 2.00% - 5.00% | 70% | 2.00% - 5.00% | 70% |
| 5.00% + | 100% | 5.00+% | 100% |
The interest rate on the Wrap cash account continues to be 0.00% per annum.
Please note that the paid rates for the International Portfolio Bond (IPB) will also adopt the rates shown in the table above, but only up to a Bank of England base rate of 2.65%. Any increase above this rate will result in a paid rate of the Bank of England base rate less 1.75%. This will ensure the paid rate for the IPB will always be the same or better than illustrated in the rates shown in the above table. At the current Bank of England base rate of 4.75%, this means that the interest paid on the IPB will be 3.00%.
Example ISA scenario:
If you have £20,000 in an ISA of which £2,000 is in product cash, your charges and interest will change as follows:
- The platform charge will reduce from £70 to £63 per annum, as the charge no longer includes the portion of cash in your ISA.
- The interest you receive on the cash in your ISA will decrease from £55 to £51*.
In this scenario, you will be £3** better off per annum.
Example SIPP scenario:
If you have £100,000 in a SIPP of which £10,000 is in product cash, your charges and interest will change as follows:
- The platform charge will reduce from £350 to £315 per annum, as the charge no longer includes the portion of cash in your SIPP.
- The Product Administration Charge will reduce from £50 to £45 per annum.
- The interest you receive on the cash in your SIPP will decrease from £275 to £255*.
In this scenario, you will be £20** better off per annum.
*Assuming the charges are as follows: £0-£250k @ 0.35%; £250k-£750 @ 0.25%; £750k-£1m @ 0.15%; £1m+ @ 0.10%
**Examples are for illustrative purposes only and are based on the base rate being at 5.00%. The amount the charges will change will depend on the individual cash holdings on Wrap.
Example paid rates
To help you understand how we calculate the paid interest rate in practice, we have provided some worked examples based on our changes and the new paid rates, in the table below.
| BoE base rate |
Rate we pay on cash |
How we calculate this |
Amount paid on cash holdings of £2,000 |
|---|---|---|---|
| 5.00% | 2.55% per annum |
0% of the first 1.10%, plus 50% of the next 0.90% plus 70% of the next 3.00%; 0.00% + 0.45% + 2.10% = 2.55% per annum |
£51.00 per annum |
| 3.50% | 1.50% per annum | 0% of the first 1.10%, plus 50% of the next 0.90%, plus 70% of the next 1.50%; 0.00% + 0.45% + 1.05% = 1.50% per annum |
£30.00 per annum |
| 1.50% | 0.2% per annum | 0% of the first 1.10% plus 50% of the next 0.40%; 0.00% + 0.20% = 0.20% per annum |
£4.00 per annum |
| 1.00% | 0.0% | n/a | £0.00 per annum |
View the current paid rates on product level cash balances.
Further information
We’ve updated your terms and conditions to reflect these changes. The new terms and conditions are effective from 16 December 2024.
You can download a copy of the updated terms and conditions for each product:
- Wrap Services Client Terms & Conditions
- Wrap ISA and Wrap Personal Portfolio Terms & Conditions
- Wrap SIPP Terms & Conditions
- Wrap International Portfolio Bond Policy Provisions
If you are not sure what you should do with any cash you hold on Wrap, it’s a good idea to seek financial advice. You can find independent financial advisers in your area at www.unbiased.co.uk.
Helpful definitions
- Platform Eligible Assets (PEA): Investments in your Wrap account which are held on the Wrap platform, and which excludes cash holdings, off-platform assets and listed securities in Wrap SIPP.
- Platform Charge: This covers our platform services, is applied monthly and is based on the amount of PEA you have.
- Product Administration Charge: This charge is based on the amount of PEA held and covers the cost of the product provider to provide the Wrap SIPP and Wrap International Portfolio Bond.
- Cash Management Administration Charge: This is for managing cash on Wrap and where a portion of the interest earned on the bank accounts used to hold your cash is retained.
Questions and answers
Useful links
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