A consultation has been launched today on the future of NEST, the government-backed provider of workplace pensions.
The consultation will consider whether the National Employment Savings Trust’s (NEST) remit needs to better reflect recent changes to the pensions landscape, including the introduction of the pension freedoms and the new State Pension, to meet the needs of its 3 million members. This may include providing new ways for members to access their pension savings and expanding the scheme to enable individuals, employers and other schemes to access NEST’s services.
Minister for Pensions Baroness Ros Altmann, said:
The pensions landscape has changed significantly in recent years and automatic enrolment has meant millions more people are saving for their retirement, with the help of their employer. NEST has played a vital role in the success of automatic enrolment and its importance is likely to increase in coming years. It is right, therefore, that we now consider how it continues to deliver its services in future.
NEST was set up in 2010 ahead of the drive to automatically enrol all employees into workplace pensions. So far 6.3 million people have been automatically enrolled into schemes, a number that is set to rise with the rollout of automatic enrolment to smaller employers.
The consultation document – “NEST: evolving for the future” can be found here and it runs for 12 weeks.
NEST continues to be critical to ensuring that automatic enrolment is introduced effectively. It has helped to advance significant change in the way pensions are delivered and communicated, and ensures that every employer in the UK with duties has access to a suitable scheme. By 2018, NEST will be one of the biggest pension schemes in the UK.
This is why I think the time is right to consider how NEST might evolve to respond to wider pension reforms. NEST must continue to be a good quality, viable scheme that can meet the needs and aspirations of its members throughout their lives.
‘The current restrictions on NEST risk leaving its members without the help and support some of them need to make the most of their retirement savings,’ said Tom McPhail, head of retirement policy at Hargreaves Lansdown. ‘With pension freedom the rules of the game changed, so the services offered by pension providers needed to change too.’
He explained that commercial pension providers have all already adapted to reflect this and that now is the time for NEST to do the same.
‘NEST has an opportunity to pioneer new ideas around the provision of drawdown for lower value and financially disengaged investors, as well as innovative solutions to the challenges of longevity insurance, through the use of deferred annuity type products,’ McPhail added.
