Fidelity has changed the terms and conditions of its Sipp cash-back offer after concerns were raised customers could be hit with an unauthorised payment charge.
The offer, which was launched in June and ends on 31 December, pays 1 per cent cash-back to anyone who transfers £10,000 or more into the Fidelity Sipp.
However, the original terms of the contract allowed Fidelity to claw back the payment from a client’s pension fund if they decided to move their funds out of the Sipp within two years.
Aviva head of policy, pensions and investments John Lawson says the claw-back would trigger an unauthorised payment and the investor would face tax penalties of up to 55 per cent.
Fidelity has now decided to amend its terms and conditions to remove the clause which allows it to retrieve the cash-back from the client’s pension.
A Fidelity spokeswoman says: “To make it viable for us to offer this generous cash-back, customers who take advantage of this deal are required to stay with us for a 24 month period after transferring their assets.
“However, following a review of our approach, Fidelity has decided to remove a clause that would allow us to deduct the cash-back amount from the customer’s pension account.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “Fidelity clearly has not paid enough attention to the detail in coming up with this offer.”