Three Investment Platforms Offer Up to £3,000 Cashback on New Pensions

Fidelity and Interactive Investor are currently offering substantial cashback incentives for individuals opening new self-invested personal pensions (Sipps). Fidelity is providing up to £2,500, while Interactive Investor is offering up to £3,000, with the amounts dependent on the size of the pension pot.

Aviva also has a cashback offer, though it is exclusively for pension transfers rather than new deposits. These promotions are designed to attract new customers to the investment platforms.

Cashback Deal Comparisons

Interactive Investor offers the highest potential cashback of £3,000, but this requires a pension pot of £1.5 million. This offer is set to close on September 30. Both Aviva and Fidelity offer a maximum of £2,500 cashback, which is attainable with a £1 million pension pot. Aviva's deal ends on November 23, and Fidelity's on November 9.

To qualify for the minimum cashback of £100, which is offered by both Aviva and Interactive Investor, a pension pot of at least £20,000 is required. Fidelity's minimum threshold for its cashback offer is £40,000, providing £250 in return.

| Pension pot size | Interactive Investor cashback | Aviva cashback | Fidelity cashback | | :-- | :-- | :-- | :-- | | £20,000 | £100 | £100 | N/a | | £50,000 | £150 | £400 | £250 | | £100,000 | £250 | £750 | £600 | | £250,000 | £500 | £1,000 | £1,000 | | £500,000 | £750 | £1,000 | £1,250 | | £1,000,000 | £1,000 | £2,500 | £2,500 | | £1,500,000 | £3,000 | £2,500 | £2,500 |

Evaluating Platform Fees

While cashback offers can provide a significant boost to a pension pot, investors are advised not to make their decision based solely on these incentives. It is crucial to assess the platform's ongoing fees, as these could potentially negate any cashback benefits. Each platform has a different fee structure:

• Aviva: Charges an annual fee of 0.35% on the first £500,000 of the pension pot, with no charge on amounts above that, capping the annual account fee at £1,750. Fund dealing is free, but share dealing costs £4.99 per trade.
• Fidelity: Charges 0.35% of the investment value, reducing to 0.2% for pots over £250,000, and no charge for amounts exceeding £1 million. Fund dealing is free, while share dealing costs £7.50 per trade.
• Interactive Investor: Operates on a flat monthly fee system: £5.99 per month for pots under £100,000 and £14.99 per month for larger pots. Fund dealing is capped at £3.99, and share dealing costs £3.99 for UK and US shares, with a maximum of £9.99 for international shares.

For example, an investor with a £250,000 pension pot would incur annual account fees of £875 with Aviva, £500 with Fidelity, and £179.88 with Interactive Investor. The fee structure can significantly impact the overall cost, with percentage-based fees potentially being more expensive for larger pots compared to flat-fee models.