Get paid up to £1,500 to transfer your pension! How does Fidelity's cashback Sipp offer compare with the rest?

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Investors could earn up to £1,500 by transferring all their pension pots into Fidelity’s Sipp.

The platform allows them to manage their investments, keep track of their pension pot and withdraw money in retirement. 

The cashback offer, available until 18 December, is available for those with big retirement savings as you will need a minimum of £100,000 to be eligible.

You will need to stay with Fidelity for 18 months or will have to pay the money back, so does this offer make it worth moving your pension?

More cash in your pocket: Is getting cashback really enough of a reason to move your pension?

It is easy to accumulate more than one pension over your working life.

Each time you move jobs a new pension could be opened, meaning you could easily end up with a lot of different pots.

Putting them all into a self-invested personal pension (Sipp) is a handy way to manage them in one place, but you need to choose the right platform for your needs so you can keep your investing costs down.

Nowadays, it is also important to consider what flexibility your Sipp offers and how much it costs when it comes to wanting to take your money out.

From age 55, most people with defined contribution pensions no longer need to buy an annuity, as they previously did. Instead they can now stay invested and either take cash lump sums or go into a process called drawdown. But the charges for doing this with different providers will vary.

What is Fidelity offering?

New and existing Fidelity investors can transfer their pension onto its Sipp platform, where they can manage their investments and withdraw money, and earn between £250 and £1,5000 cashback.

The platform will also cover up to £500 in exit fees charged by the existing pension manager/platform.

The catch is that you will need to have already built up a large pot of savings to get any cashback.

You will need a minimum of £100,000 to get just £250 cashback and £500,000 or more to get £1,500.

Fidelity has an annual fund administration fee of 0.35 per cent on assets up to £250,000 and 0.20 per cent over £250,000, which is applied to the whole amount.

You will also need to pay fund annual management charges and online share dealing is £9.

Going into drawdown or taking cash out at retirement is free. There is no charge for taking an annuity unless you want professional advice from an adviser in Fidelity's retirement service. 

Cashback and cost shouldn’t be the only factor when choosing a Sipp.

You need to look at the extras such as investing tools or guidance.

Fidelity is offering a 'free chat' to inform what people should bear in mind when transferring a pension such as looking for guaranteed annuity rates or high tax free cash rates.

If you want to have your own pension checked then you will need to pay £120 per policy.

You can also access research and a range of low-cost index funds starting at 0.06 per cent and use its pathfinder tool that helps construct a portfolio based on your risk profile.

Mark Polson, of platform consultancy the lang cat said: 'Money in investors' pockets is good. These kinds of incentives do sometimes feel like they twist things a little bit in terms of the misalignment of a short-term incentive for a long-term product. It needs to be suitable. 

'In effect, Fidelity is offering investors a free year.'

How much are other providers offering to move your pension? 

Fidelity isn't the only provider offering cashback to temp investors. 

Some will offer cashback and others will cover exit fees up to a certain amount from providers.

We reveal some of the offers available below. 

Remember before transferring your pension pots you should check for any exit penalties, guaranteed annuity rates or protected rights you could be missing out on by transferring.

The annual fees are important but you also need to look at the overall cost of investing such as fund and dealing charges, as well as extras such as model portfolios or research tools. 

Hargreaves Lansdown

You could transfer your pension pots to Hargreaves Lansdown’s Vantage Sipp and earn up to £500 cashback until 15 December.

You will need a minimum of £5,000 to get £20 back or £125,000 to get the £500.

Hargreaves has an annual administration charge for funds is 0.45 per cent for up to £250,000 then 0.25 per cent for the next £250,000 to £1m then 0.10 per cent. There is a separate 0.45 per cent charge for holding shares, applied to the whole account, but capped at £200.

Fund dealing is free but you will need to pay £11.95 a month for up to nine share deals, £8.95 for between ten and 19 and £5.95 for 20 or more.

There is no charge for taking cash or drawdown. 

Once all funds are withdrawn there is a £30 closure fee. 

An annuity purchase through Hargreaves Lansdown is free unless you do it through another provider, in which case there is a £180 charge. 

Investors can access discounted funds on the Wealth 150 list and make use of research and videos to help choose their investments.

Hargreaves Lansdown also offers services such as Portfolio+ which helps set up and manage your investment for you. There will just be the Vantage platform charge to pay as well as fund fees starting at 1.32 per cent depending on the investment goal

AJ BellYouInvest

AJ Bell Youinvest is offering up to £500 to cover exit charges for investors moving their money, as long as your portfolio is worth £20,000 or more.

You have to pay an extra holding charge for a Sipp.

Sipp investors with assets worth up to £10,000 will pay £5 per quarter, this increases to £15 for between £10,000 and £20,000 and £25 for more than £20,000.

There is just one annual admin charge for holding funds at 0.20 per cent with a £200 cap, but you will pay varying amounts depending on whether you want to trade funds or shares.

Fund dealing has a flat fee of £4.95, while if you want to trade in shares this will cost you £9.95 a month for zero to nine deals, and £4.95 for ten or more.

When it comes to retirement, there is a £130 annual fee for regular drawdown payments.

Taking out regular cash sums would cost £120 a year or one off withdrawals would cost £90. Annuity purchases are £180.

Once the pension pot is empty there is a closure fee of £354. 

AJ Bell YouInvest has this week launched three ready-made portfolios, each consisting of six tracker funds. You just pay the annual platform and Sipp charges as well as the fund fees and dealing charges.

Tilney Bestinvest

Tilney Bestinvest will cover up to £500 of transfer costs for Sipp transfers.

The platform has an annual Sipp charge for funds and shares of 0.30 per cent up to £250,000 and 0.20 per cent for £250,001 to £1m.

Fund dealing is free, while share deals will cost you £7.50 a time. 

The platform has a range of research tools, fund recommendations and reports. 

Purchasing an annuity on Bestinvest would cost £90 if done through the platform or £185 externally.

Going into drawdown would mean an initial calculation fee of £120 if the Sipp is valued below £10, 000 and £108 if it is above £100,000. 

Taking out lump sums for income payments costs £120 a year for Sipps valued below £100, 000 and nothing for those with a Sipp valued above £100, 000. 

One-off payments cost 30.

The Share Centre

You can get £300 towards transfers costs if you move to the Share Centre.

The Share Centre Sipp will cost you £14.40 a month.

A standard dealing account would cost you 1 per cent with a minimum of £7.50, while more frequent traders could get an account that costs £7.50 a trade plus a £24 quarterly fee.

Setting up drawdown costs £265 and an annuity purchase costs £210.

Regular income payments will cost £234 a year. 

SIPPS FOR DIY PENSION INVESTORS

0.25% funds fee

Online dealing starting from £1.50

Flexible service

Free fund dealing available

From £9.99 a month

Flat fees control costs

Reduced Sipp fee

0.2% fee for ready-made portfolios

Service fee 0.35%

Flexible retirement options

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