Nest pension scheme faces challenge from Denmark

Strong private-sector challenges are emerging to a government scheme designed to get millions of British workers saving for retirement.

Last week, the Danish firm ATP announced that it will be launching a new low-cost workplace pension called "Now: Pensions" for British employees to coincide with the advent of auto-enrolment next year.

This means that Now: Pensions will go head to head with the government-sponsored Nest pension scheme. From next October, millions of British workers who are not members of a company pension scheme will be auto-enrolled into Nest or the existing company pension scheme. Employees and their employers will have to contribute a percentage of salary into a Nest pension pot.

It was expected that Nest would become the main vehicle for these workers. However, Now: Pensions' parent company, ATP, points to its experience of managing 4.6 million workplace pensions in its home country of Denmark. Charges will be very low, with ATP promising a monthly administration fee of £1.50 and an annual charge of 0.3 per cent. According to Tom McPhail, pensions expert at independent financial advisers Hargreaves Lansdown, ATP may have the drop on Nest as far as charges are concerned. "These are very competitive, and perhaps on higher-value schemes even slightly better."

It seems Now: Pensions is not the only challenger: this week B&CE will outline its own alternative and it's rumoured that the Federation of Small Businesses will get in on the act. As a result, Nest might not hit its target. "If they attract, say, only a million people into Nest, there are going to be some painful conversations with those providing the investment schemes that Nest money is to be put into and with the Treasury," Mr McPhail said.

However, Nest senior executives seem sanguine about the competition. "You'd expect a bigger market to attract new entrants and we welcome this, especially if it improves outcomes for pension scheme members. We still expect there to be between two and five million Nest members by the end of September 2016," said Tim Jones, chief executive of Nest.

Independent Partners: 10 top tips for retirement. Get your free guide here

Suggested Topics
PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Recruitment Genius: Web Developer - PHP

    £16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

    Day In a Page

    Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

    Greece elections

    In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
    Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

    Holocaust Memorial Day

    Nazi victims remembered as spectre of prejudice reappears over Europe
    Fortitude and the Arctic attraction: Our fascination with the last great wilderness

    Magnetic north

    The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
    Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

    Homeless Veterans appeal

    Homeless in Wales can find inspiration from Daniel’s story
    Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

    Front National family feud?

    Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
    Pot of gold: tasting the world’s most expensive tea

    Pot of gold

    Tasting the world’s most expensive tea
    10 best wildlife-watching experiences: From hen harriers to porpoises

    From hen harriers to porpoises: 10 best wildlife-watching experiences

    While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
    Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

    'I don’t want just to hold tackle bags, I want to be out there'

    Nick Easter targeting World Cup place after England recall
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore