New National Employment Savings Trust

  • The scheme will be focused on low-to-moderate earners who don’t currently participate in a workplace pension scheme, with an annual contribution limit of £3,600 at 2005 levels.Employers can use NEST (National Employment Savings Trust) in different ways, but in most cases there will be headroom under the limit for employers and/or members to contribute more than the minimum and to structure their contributions in different ways.For example:
    • where an employer makes contributions on the minimum band of earnings required by the Pensions Act 2008, an 8 per cent contribution for an average earner (approx £25,100) would be approximately £1,600 per annum
    • alternatively, an employer might choose to make contributions on a broader band of earnings, for example by basing them on the first pound of pay. In this case an 8 per cent contribution for an average earner (approx £25,100) would be approximately £2,000 per annum
  • Transfers in and out of the scheme are banned (except in some special circumstances, such as annuity purchase at retirement).
  • The scheme provides a portable and flexible option for members who change jobs frequently (where their different employers choose NEST to meet their auto-enrolment duties).
  • The scheme will be open to any employer of any size or sector that wishes to use it to fulfil their auto-enrolment duties.
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