All the pension switching offers on now – as FCA set to review incentives

The financial watchdog is eyeing up pension transfer cash incentives in a consultation set to be published later this year.

Pension transfer incentives are where pension providers offer cash back or a pension top-up to anyone who transfers their pension to them. For example, Interactive Investor currently offers up to £200 cashback for anyone who switches to its Self Invested Personal Pension (SIPP).

The watchdog’s consultation could be set to look at whether new rules should be introduced around how these incentives are offered, as it has recently expressed concern that some people may be transferring their pensions solely on the basis of the switching deal, without looking at the rest of the benefits of the pension they are moving to vs the one they are leaving.

Pension providers argue that incentives are a great way of engaging customers with their pensions, however.

We’ve rounded up all of the pension transfer deals currently on offer:

• This month, Interactive Investor is offering customers £200 cash back if they open a SIPP and deposit or transfer at least £15,000 into it. The offer ends 30 September, and the cash back will be paid after 12 months of having the account.
• Charles Stanley is currently offering up to £1,500 cash back to customers who transfer their cash or investments to an ISA, SIPP or general investment account. You need to transfer at least £20,000 in to be eligible for cash back. There is currently no end date on this offer.
• AJ Bell is currently offering to pay up to £500 to customers who transfer their SIPP or ISA to it. This includes up to £35 per investment moved, and up to £100 to cover exit fees. You need to transfer in at least £20,000 to be eligible. There is no end date listed on this offer.
• Fidelity is currently offering a £100 Amazon gift card to anyone who refers a friend to its SIPP or Stocks and Shares ISA – and the friend gets £100 for transferring too. The person transferring must transfer at least £5,000 to be eligible. There is currently no end date listed on this deal.
• Freetrade is offering 3% cashback on  pension transfers, up to a maximum of £1,500. It said the deal was due to end on 31 August, but the deal appears to still be live. You need to transfer in at least £10,000 to get the cashback.

What else to consider when switching pensions

While cash back can be a great deal if you’re thinking of switching your pension, it’s also worth comparing the fees and charges of your old pension and your new one.

Make sure you check whether you will have to pay any exit fees to leave your current scheme, and if your scheme has any valuable benefits attached to it. The scheme should tell you this, but it’s worth asking just in case, and to make sure you understand them fully.

Compare what the overall annual charges are on both schemes, as higher charges can eat into your pension. You should ideally transfer to a scheme with a lower or comparable annual fee, unless you are intentionally moving to a scheme that offers more services that you require for a higher fee.

Be sure to check where your funds are invested when you transfer. If you’re moving to a SIPP, you will have greater control over where your money is invested – read our full guide to SIPPs.