Transferring SIPPS can take time and money, but some providers are looking to tempt new customers with SIPP cashback offers. Here’s how to decide whether it’s worth making the leap.
Moving your SIPP can be difficult, expensive and time-consuming. You may find yourself incurring all sorts of exit fees and, at the end of it all, you may find that the actual value of your new SIPP is not everything you’ve hoped for. The result? You’ve invested a lot of time and energy to make yourself poorer.
The good news is that SIPP providers are involved in a constant battle for the best clients, and many will be willing to offer attractive cashback options for people who transfer their SIPPs.
The Best SIPPS Transfer Cashback Offers
A quick list of SIPP accounts that offer cashback offers are:
Hargreaves Lansdown periodically offers cashback deals on SIPP transfer. Their most recent was last summer where they offered up to £500 cashback. Keep an eye on the site and register for their newsletters to be notified of the new Sipp cash back offers.
Interactive Investor will provide up to £2,000 cashback to investors who transfer funds. They say they will reimburse some or all of your exit fees when you make a transfer. Fidelity will cover you with up to £500 cashback if your provider charges an exit fee. AJ Bell promises up to £500 in cash for anyone who transfers SIPPs or ISAs and a free case of wine.
Many of these deals come with a time limit as providers seek to create an additional sense of urgency to shift clients from the clutches of their competitors. It’s worth keeping an eye out for the latest deals to see who is offering cashback at any one time.
How to chose SIPP cashback offers
When making the decision, you need to make sure you understand all the cost implications. Some of these deals are not actually cashbacks but come with higher than normal fees. In other words, they are using your money to fund your own cashback and hoping you won’t notice. The fact that they feel the need to pay you to make a transfer may also say something about the underlying quality of their SIPP. Perhaps it’s not as good as it looks.
Should you use a SIPP transfer cashback offer?
New providers will often say they will cover you for ‘up to’ a certain amount, so you need to look beyond the headline figure and see how much they will really give you. As so often, the devil is in the detail.
It’s a balancing act. On the one hand you must calculate the full extent of the exit fees you could be facing and on the other you should make sure you read the small print of any SIPP transfer offer. Make sure you understand all the features of the SIPP and its fees. Only then will you be able to decide whether it really is worth making the leap.
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Tom Cropper is a financial journalist with work which has appeared in titles such as the Guardian, Euromoney and many others.