Here’s how to find which SIPP providers are offering the best transfer cashback offers and deals that could earn you money when you move your SIPP to a different provider.
Where to find the best SIPP offers
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.
Should you switch SIPP providers?
Self-invested pension transfers can take a long time. Fortunately, plenty of providers offer cashback and special incentives to those who want to switch.
This is because maximising your pension pot can often be improved with a switch to a new, better performing provider. According to a recent study from Which switching to a self-invested pension could save more than £20,000 in the run up to retirement.
The idea of switching becomes even more attractive when you consider how many special offers leading providers have put in place to attract switches. From cashback to temporary discounts, switching your pension could offer all sorts of benefits.
The best SIPP transfer cashback offers
Several of the leading providers regularly offer deals on their pensions including:
- AJ Bell
- Interactive Investor
- Hargreaves Lansdown
Interactive Investor offers flat fees which, they say, could make its customers up to £94,000 per year better off. For anyone transferring in at the moment, they have promised to waive their SIPP fees for six months – a total saving of £60. All anyone will have to pay is the £6.99 a month service plan.
Fidelity is still revelling in its status as SIPP provider of the year in 2020. They offer up to £25 cashback offer for each of their investment accounts. If you chose to move an ISA, SIPP and investment account, for example, you’d be looking at a grand total of £75.
AJ Bell has a page dedicated to its special offers. The most eye catching at the moment is a promise to pay up to £500 cashback for anyone transferring a SIPP, ISA or dealing account to them. They will pay £35 per investment moved and up to £100 general exit fees up to an overall maximum of £500 per person.
One of the biggest providers is Hargreaves Lansdown which periodically runs SIPP special offers. Back in 2019 it was offering cashback of up to £500 for any SIPPS opened that summer. Check back with them for any updates.
How to chose SIPP cashback offers
Each of these looks attractive, but it is important to understand the detail before you commit to a switch. You should consider cashback offers should against the overall price of the pension carefully. For example, providers have historically masked higher annual fees when compared to competitors with attractive cashback offers. In other words, they are using your money from high fees to pay for their special offer. Suddenly things don’t look so rosy.
Others place limits. Cashback may rise and fall depending on how much you’re putting in. To get the full value, you might have to transfer quite a high amount. Others will only cover a certain amount.
Special offers on SIPPs, therefore, can be great, but they don’t tell the whole story. When choosing a SIPP always look at all the features and their fees before you decide whether to take the plunge.
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. Check this carefully, if the cashback offer isn’t enough to cover any costs associated with moving your account away from your existing provider you will need to consider if this provider still offers the best deal for you.
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 change.
Ultimately, you will be better off in the long term paying low annual fees for SIPP management and earning the best returns, over a gaining a £250 cashback offer now but paying more for your SIPP for the next 20 years.
SIPP transfers can be difficult, expensive and time-consuming but our comparison can make it easier to choose the best SIPP provider for your account.>
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his work has appeared in titles such as the Guardian, Euromoney and many others.