Business and Financial News

The Government is launching a new low-cost pension scheme called Nest

When a name fits, you can be forgiven for thinking you’re on to a good thing. So for those who may be relying on the Government’s new low-cost pension scheme to help squirrel away a little “nest” egg for those autumn years, you can be confident in the knowledge that the National Employment Savings Trust, or Nest, is off to a fine start.

The scheme from the Personal Accounts Delivery Authority (PADA), which is aimed at people on low or moderate earnings who do not currently have access to a pension, will be available in low volumes from 2011.
Its introduction is part of Government pension reforms being phased in from 2012, under which all workers earning above a certain level will automatically be enrolled into a company pension scheme or Nest, although they will retain the right to opt out.
Individuals will have to pay in at least 4% of their salary to the scheme, with employers contributing 3% and the Government adding 1%.
However, contribution levels will be phased in gradually to enable workers and companies to adjust to the costs.
The scheme will be run by the not-for-profit Nest Corporation.
The announcement was welcomed by the National Association of Pension Funds. Its chief executive, Joanne Segars, said the announcement brings the country a step closer to the 2012 reforms that aim to have nearly all working people, especially those on low and moderate incomes, given this opportunity.

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