NEST to be reviewed by new government

NEST to be reviewed by new government

08 June 2010 / by Lois Avery

NEST is set to be reviewed by the new pensions minister Steve Webb to see whether it will go ahead in 2012.

NEST (National Employment and Savings Trust) was set up by the Labour Government to provide a compulsory pension scheme for all workers not enrolled on an employee scheme. The idea was to create compulsory saving, which workers have to opt out of.

The scheme is not due for launch until 2012 but the new Government will now be reviewing NEST to assess its affordability and determine whether it will offer workers a good deal.

 The internal review will focus on looking at how the proposed NEST system will affect the lowest income workers, and whether they will really benefit from being auto-enrolled.

Many believe that the government pension scheme will be detrimental to lower income workers as their rewards from saving may well be outweighed by the loss of means tested benefits available to them.

Commenting on the review for Reverend Dr John Strain said:  “The Department for Work and Pensions review should look at the impact of NEST on existing more generous schemes and the dangers of them levelling down as well as exploring more flexible pension models.

“Early access pension models have been favoured by both the Conservative Party and the Liberal Democrats and are mentioned in the coalition agreement. But we have heard nothing on this since.

“It is not just NEST that needs reviewing, our pension system is overly complex, expensive and for many has failed to deliver the returns they were lead to expect. Another review is a necessary evil, so let's make sure it is done comprehensively and considers the key pitfalls not only within NEST, but also in pensions and savings more widely.”

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