NEST stands for the National Employment Savings Trust and is a government scheme that is designed to encourage employers to offer private pensions to employees and encourage individuals to save for their retirement.
All individuals will be automatically enrolled into a company pension scheme in which both individuals and employers will contribute. It will be possible to opt out of the NEST scheme.
It is expected as the scheme becomes established that employers will have to pay a minimum of three per cent of an employees’ annual salary and employees’ will be expected to contribute a minimum of five per cent of their annual salary in to the pension fund.
It is likely that the scheme will become the UK’s largest pension scheme. The scheme will charge members two per cent initially to cover its start-up costs. It is not known how long this initial charge will last. There will also be an annual management charge of 0.3 per cent.
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