UKs DWP to Consider Scrapping NEST Restrictions

23 January 2012 (PLANSPONSOREurope.com) -UK Pensions Minister Steve Webb says he is “reflecting” on whether or not to remove restrictions placed on the National Employment Savings Trust (NEST) in response to new entries to the auto-enrolment market. 

Transfers in and out of NEST are banned and annual contributions are capped at £4,200. Some MPs have claimed that these restrictions will prove very problematic for the scheme. 

The restrictions were due to be looked at again in a review in 2017.  

Speaking at Work and Pensions questions in the House of Commons on Monday, Webb said the restrictions on NEST were put in place to ensure the scheme focused on low to middle income earners. 

He said: “The situation has moved on, competitive developments in the market have emerged which were not necessarily foreseen, so we are certainly reflecting on the role of those constraints.” 

He was responding to a question from Shadow pensions minister Gregg McClymont who said the restrictions should be looked at because the country is facing a private pensions crisis. 

Webb’s statement is seen by many as a response to multi-employer trust offerings launched at the same target market as NEST, putting pressure on the government-backed scheme, including Danish provider NOW pensions. http://www.plansponsor.com/NOW_Pensions_Launches_in_UK.aspx  

PLANSPONSOREurope Staff
editors@plansponsoreurope.com