What is a NEST pension scheme?
As part of the government's workplace pension reforms your employer is now likely to provide a workplace pension scheme. This will be provided by NEST and full details of their pensions can be found at https://www.nestpensions.org.uk/schemeweb/nest.html
This is not compulsory. You have a choice. If you do not join the scheme there will be no deduction from your salary, no contribution from your employer, and no payment toward a pension for your retirement.
The NEST pension scheme is a government sponsored workplace pension scheme. You can contribute for your entire working life and it can be carried on in any further employment.
This is a defined contribution pension in which you build up a pot of money that you can then use to provide an income in retirement. Unlike defined benefit schemes, which promise a specific income, the income you might get from a defined contribution scheme depends on factors including the amount you pay in, the fund’s investment performance and the choices you make at retirement.
Once you join the scheme, both employee and employer make contributions into the pension scheme. For the tax year 2017/2018, the employee pays in contributions of 1% and the employer also pays in 1%. This will rise in April 2018 with the employee paying 3% and the employer 2%.
You have to decide if you want to join the pension scheme your employer provides. If you do you will receive further information directly from NEST. They will also provide you with access to your NEST members’ account. This will allow you to amend personal information; make changes to the way your contributions are invested; make extra contributions; and withdraw money from the scheme where that is possible.
Neither we nor your employer are allowed to advise you whether to join the scheme. If you are unsure about your options and how they work, you can get free and impartial guidance from Pension Wise, a government backed service run by The Pensions Advisory Service and Citizens Advice. The Pension Wise service can give general advice but they cannot tell you which option is best for you. If you are at all uncertain about what to do you can get advice from a regulated financial adviser who may charge a fee.
- What is a NEST pension scheme?