Legal & General SIPP £120 Cashback - *Now Ended*

BlueLeaf

Hi

Looks like Topcashback are offering £120 to open a SIPP with Legal & General.
The minimum investment appears to be £100 (initial lump sum?). Has anyone done this / had any issues getting the cashback?

https://www.topcashback.co.uk/legal-and-general-sipp/

Thanks

Alexland

That looks like a very good offer.

We each opened L&G S&S ISAs via TopCashBack at the start of the new tax year April and took the precaution of using different computers and our own TCB accounts incase there were any problems with the tracking. Mine tracked within 24 hours but my wife's didn't track so she submitted a claim after 7 days. Mine became payable after about 4 months and my wife's took an extra month but no need to chase them. I like TCB as they just paid out on my insolvent Maplin claim from 2017 although that did take some chasing.

L&G have recently sold their retail customer book so you might find your new account migrated to Fidelity during the 24 months. L&G have a SIPP platform fee of 0.25% compared to Fidelity at 0.35% which is slightly more expensive but Fidelity charge a minimum of £45 pa if your account is under £7.5k and you don't have a regular saving plan which is very expensive for a tiny account. When Fidelity took over Cavendish they promised to honour the existing lower charges for a while so it will be interesting to see what they offer L&G customers.

Unsure if we would qualify for the offer as the terms are "Cashback is only available to new Legal & General ISA (Unit Trust Managers Limited) customers. This means to be eligible for the cashback, you cannot currently hold a Self-Invested Personal Pension (SIPP) Account with Legal & General". Obviously we are existing Legal & General ISA (Unit Trust Managers Limited) customers but don't have a SIPP with them. Hmmm.. sent L&G a secure message asking.

Albermarle

L&G have recently sold their retail customer book so you might find your new account migrated to Fidelity during the 24 months.

I did not even know L&G offered pensions to the public anymore , I thought they were getting out of this area.

Anyway the 'SIPP' seems to have a limited fund choice of L&G funds only so not really a SIPP at all .

Why do you mention Fidelity, is there a link with them ?

Alexland

Albermarle said:

Why do you mention Fidelity, is there a link with them ?

https://www.theguardian.com/business/2020/oct/23/legal-general-sells-its-personal-investing-business-to-fidelity

My guess is that L&G will reduce the fees or convert the retail class fund units into institutional class fund units to reduce the OCF to give enough headroom for Fidelity to charge their 0.35% platform fee (or 0.20% for us as Wealth customers) to honour their promise that charges won't increase. L&G have no platform fee on the ISA but it's 0.25% on the SIPP. But some customers (including those signing up under this offer) could still get penalised with Fidelity's £45 pa charge on a small account if there is no regular savings plan. Maybe this aspect of Fidelity's standard pricing will need to change.

garmeg

I wonder how long to pay the caahback, because one of the terms for no cashback is ...

"Customers withdraw all of their funds from their Legal & General account within 24 months of initial investment."

Alexland

garmeg said:

I wonder how long to pay the caahback, because one of the terms for no cashback is ...
"Customers withdraw all of their funds from their Legal & General account within 24 months of initial investment."

It was the same 24 month lock in with our L&G ISAs but they didn't wait that long to payout. We also had to commit to making a net minimum £2500 contributions by the end of the 24 month period but are contributing more than this in this first tax year and will use another cheaper ISA probably Fidelity (or continue with the same ISA if it transfers) for next tax year. I had to do the maths to prove that the cashback was worth it given the higher L&G fund charges compared to the trade fees and lower fund charges on our historic iWeb accounts. This SIPP deal looks better as it's a similar cashback value for just a £100 commitment. And of course unlike a S&S ISA you are free to also contribute to other pensions in the same tax year.

Asghar

Anyone know if the £100 minumum investment is including the tax relief, just says invest £100 on their site.

Albermarle

Alexland said:

Albermarle said:

Why do you mention Fidelity, is there a link with them ?

https://www.theguardian.com/business/2020/oct/23/legal-general-sells-its-personal-investing-business-to-fidelity

My guess is that L&G will reduce the fees or convert the retail class fund units into institutional class fund units to reduce the OCF to give enough headroom for Fidelity to charge their 0.35% platform fee (or 0.20% for us as Wealth customers) to honour their promise that charges won't increase. L&G have no platform fee on the ISA but it's 0.25% on the SIPP. But some customers (including those signing up under this offer) could still get penalised with Fidelity's £45 pa charge on a small account if there is no regular savings plan. Maybe this aspect of Fidelity's standard pricing will need to change.

I recently moved an old  smallish S&S ISA from L&G to Fidelity , mainly to reach the cashback target that I was just shy of after a pension transfer . Strangely I did not get a choice of inspecie or cash .
Anyway  the money  came over pretty quick as a mixture of funds that were available with Fidelity, and cash for those that were not. With L&G they were typically 0.6% all in but were converted to I units at 0.1% + the Fidelity platform charge .

Alexland

Albermarle said:

I recently moved an old  smallish S&S ISA from L&G to Fidelity , mainly to reach the cashback target that I was just shy of after a pension transfer.

Fidelity took ages and lots of chasing to payout our cashback from making a single pension transfer each so you must have really confused them by reaching a target through both a pension and ISA transfer - did it take a lot of explaining to them?

Albermarle said:

Anyway  the money  came over pretty quick as a mixture of funds that were available with Fidelity, and cash for those that were not. With L&G they were typically 0.6% all in but were converted to I units at 0.1% + the Fidelity platform charge .

In which case fund class conversion is probably what they will do with the direct L&G customers when they transfer across. I remember a while ago a long forum discussion on if fund class conversion creates capital gains problems for unwrapped accounts but I forgot what the conclusion was.

Still interested to know if Fidelity will drop the £45 fee on a small account without regular investment. Unlike the small Cavendish transfer this L&G transfer will be big enough they might modify their standard pricing to accommodate the promise. It will hopefully be good for us as the cheaper fund class plus the reduced 0.20% platform fee will cost less than expected when doing the maths on the L&G ISA cashback deal. Once the 24 months is up we would use Fidelity to switch into the HSBC fund ready to transfer into our existing iWeb account.

If we are also eligible for this 'free money' SIPP offer then we would just transfer it into our existing Fidelity SIPPs after 24 months to improve the cash balance and pay for a couple more years capped platform charge.

garmeg

Asghar said:

Anyone know if the £100 minumum investment is including the tax relief, just says invest £100 on their site.

The minimum starting amount is £100 net (£125 gross).

Albermarle

Fidelity took ages and lots of chasing to payout our cashback from making a single pension transfer each so you must have really confused them by reaching a target through both a pension and ISA transfer - did it take a lot of explaining to them?

The cashback is not due yet as I only did it recently - end of January I think.

I already transferred a pension to Fidelity  before and the cashback paid out on time - no problem, perhaps I was lucky .