Government-implemented pension scheme – NEST
The National Employment Savings Trust – NEST – has been unveiled as the new brand name for Personal Accounts.
The NEST Corporation will be the name of the trustee body running the scheme. The name of the scheme was announced by Pensions minister Angela Eagle.
NEST is the scheme being introduced, in stages, from October 2012. The Government-implemented scheme is being created to provide a low-cost, independent, workplace pension scheme which any employer can access. The Government created the scheme to give millions of mainly low to middle income workers access to an employer sponsored scheme. NEST accompanies the introduction of auto-enrolment into a qualifying workplace pension scheme from 2012.
Occupational schemes set up by firms can be used to auto-enrol workers if they meet certain criteria. However, the employer can use personal accounts as an alternative for all, or part, of their workforce.
National Association of Pensions Funds chief executive Joanne Segars says: “We all need a pensions nest egg to enjoy a comfortable retirement. Already almost 12 million people are saving in a workplace pension with contributions from their employer. Today’s announcement brings us a step closer to the 2012 reforms when nearly all working people, especially those on low and moderate incomes, will be given this opportunity.”
Hargreaves Lansdown head of pensions research Tom McPhail, adds: “I am optimistic that NEST will have a positive impact on the UK’s retirement savings and that it will help millions of non-savers to build up a decent retirement pot.’ The key message is don’t delay. Enrolment into NEST won’t be fully up and running until 2017 and every year of delay means a lower eventual pension. Don’t wait for your employer or the government to take the initiative, start saving for retirement today,”
A full-roll out of the scheme, which requires all employers to enrol their staff into a pension plan, had been due to start in 2012. But a series of political setbacks have seen the plans delayed twice. In December’s Pre-Budget Report, the Chancellor announced a phased introduction of the scheme for smaller employers would be extended from a 2015 finish to a 2017 start.
The move followed a Government decision in October to scrap a blanket roll-out of the scheme in favour of a phased approach, with only the largest employers being forced to start the scheme in October 2012. Smaller employers had then been expected to join the trust-based occupational pension scheme over the following three years.
