Investors to benefit from company’s new SIPP loyalty bonus

Investors to benefit from company's new SIPP loyalty bonus

Investors to benefit from company’s new SIPP loyalty bonus

Hargreaves Lansdown will be crediting the SIPP loyalty bonus to their investors’ accounts in most cases monthly, and as cash, from January 2013.

Over 120,000 SIPP, or Self Invested Personal Pension, investors will benefit from the £6m a year boost that Hargreaves Lansdown are giving their retirement savings thanks to their SIPP loyalty bonus they have introduced, which will be up to 0.5% a year for over 1000 investment funds.

The question investors are asking themselves is how much will they actually receive, so here are a few examples to help you work it out. The are based on a bonus of 0.25% on one of the company’s most popular funds; the Neil Woodford Invesco Perpetual High Income fund.

£20,000 SIPP VALUE >> £660 LOYALTY BONUS WORTH IN 10 YEARS

£50,000 SIPP VALUE >> £1,650 LOYALTY BONUS WORTH IN 10 YEARS

£200,000 SIPP VALUE >> £6,603 LOYALTY BONUS WORTH IN 10 YEARS

To put this in context, clients at Hargreaves Lansdown transfer pensions worth £77,471 on average to their SIPP. On this size fund, the loyalty bonus could effectively add £2,557 over 10 years.

The SIPP loyalty bonus will be credited to investors’ accounts as cash, in most cases monthly, starting in January 2013. Investors do not have to do anything to receive the bonus, it will be credited automatically.

Small Pots

With all the policy focus on small pots and the desirability of encouraging consolidation, it is worth noting that over half (51%) of Hargreaves Lansdown SIPP investors have chosen to transfer their existing pension(s) into their SIPP account.

Client Mr Kevin Ashworth, from Lancashire ‘Receiving a loyalty bonus is an added bonus. After 10 years I estimate I’ll be more than £1,300 better off thanks to the loyalty bonus. I’m certainly glad I chose to invest with Hargreaves Lansdown.’

Tom McPhail, Head of Pensions Research ‘Hargreaves Lansdown already provides over £200 million a year in discounts and rebates to our clients. Technology improvements and greater economies of scale mean we can now bring our SIPP discounts up to the same level as our ISA. In doing so we expect to boost our clients’ pensions by £6 million in the next year alone and cement our position as the UK’s largest and best, low cost SIPP provider.’

Client Ms Alicia Fox, from Cornwall ‘The loyalty bonus on our ISAs runs into the hundreds of pounds every year. Naturally, I’m very happy I’m getting one on my SIPP too.’

Visit www.hl.co.uk/bonus to find out more.

IMPORTANT INVESTMENT NOTES

A SIPP is a type of pension for people comfortable making their own investment decisions. If you are unsure of an investment’s suitability you should seek advice, because this video is not personal advice.

Investments go down in value as well as up so you could get back less than you invest. The loyalty bonus referred to in the video will be available in the Vantage SIPP from January 2013 on investments of at least £1,000 in eligible funds.

The figures assume loyalty bonuses will remain the same for 10 years, but they are subject to change; if we can’t pay cash bonuses we will endeavour to pay comparable benefits. Cash back offer deadline 23 October 2012. Terms apply. See www.hl.co.uk/bonus for full details.

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