What is a NEST pension?

Choosing the right pension could give you more money in the future. Is the new government-funded NEST scheme right for you?

The quick and easy guide to NEST pensions

If you are interested in workplace pensions and what NEST offers then this guide is for you. It explains what it is, how it works and the restrictions currently in place, as well as covering other things to consider.

Headline facts at a glance

NEST is a not-for-profit scheme, created to ensure that all employers have a suitable offering for their eligible employees. Its full name is the National Employment Savings Trust, and it is a modern scheme complete with an online account for members. If you’re thinking about joining this pension, there are some things you need to know about. That’s what this guide is for.

Is NEST run by the government?

No, it’s run by a trustee called NEST Corporation, which is a public body with no owners or shareholders. The government did originally fund the scheme, though, and they remain closely tied. For example, NEST is accountable to the Department for Work and Pensions, and the Secretary of State for Work and Pensions chooses the trustee members. Aside from this, the trustee makes its own day-to-day decisions without government interference.

Self employedCan anyone open a NEST pension?

No, it’s a workplace pension so only employers can open one. If an employer already has company schemes it is usually possible to move them into NEST if they want to. 

It’s also worth knowing that it’s a lifetime pension. That means that you can keep paying into it even if you leave your job, and if your new employer is registered with NEST you can both simply pay into your existing pot.

Is it open to the self-employed?

Yes, it is – even if you are in regular employment at the same time. Your contributions will still receive tax relief, too*. Of course, if you work for yourself then you won’t receive an employer contribution. As explained above, though, a future employer would be able to pay in.

Are there any restrictions?

At the moment it’s only possible to pay up to £4,900 per year into your pot, including tax relief and your employer’s contribution. It’s also not yet possible to move the money to another pension unless you are at least 55 years old.

Both of these restrictions are due to be lifted in April 2017, which will make the scheme much more flexible.

Whether you’re already invested in NEST or considering joining, it’s important to understand the options available to you. There are different types of pension to choose from, and if you already have multiple pots you may prefer to consolidate rather than open more.

Making sure that your pension is the best one for your needs isn’t always an easy decision – especially as there can be significant differences between them. We have already helped thousands of people to make the right choices with their pensions, and we’re here for you, too. Our free guide to personal pensions removes the mystery to give you a better understanding of your options.

Get your free personal pension guide: what’s coveredFree Pension guide

  • A deliciously quick overview of what types of pension you might have
  • The reasons why a transfer could be right for you
  • Industry phrases and what they mean
  • How our approach is different to most, if not all, financial advisers

More information...

We have included below answers to some of the most common questions we are asked. If you still need more information then why not give us a call and we can talk it through with you.

Does a NEST pension offer guaranteed benefits?

As a defined contribution scheme, it doesn’t offer guaranteed benefits. Defined contribution schemes allow you to access the money you have accrued once you are at least 55-years-old, and there are many options available for receiving an income in retirement.

I already have a NEST pension, can I switch it for a different scheme?

At the moment this depends on how old you are. If you are over the age of 55 then you can move money into and out of the pension. If you are younger than this, you can only transfer money into the pension. The rules are due to change in April 2017, when switching will be allowed for everyone.

There are various things to consider when it comes to switching your pension. In some cases, it could mean giving up generous benefits such as an income for life. On the other hand, it could mean you’ll have a much larger pot by Nestthe time you need it. With our no-obligation review, you can find out what we believe the best option is for you.

Can I see how much my pension is worth?

Yes, the scheme’s website has a login area for members. One of the things you can find in this area is the current value of your pension.

Call 0800 304 7288 for a friendly chat about your pension

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Frequently asked questions

Important information

Tax treatment depends on your individual circumstances and may change in the future

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