New Nest pension ruffles workers' feathers

Sunday 23 October 2011 01:14

More than half of workers don't know they could be automatically enrolled into a new national pension scheme starting in October 2012, and could be in for a shock when employers start taking deductions from their pay, research from HSBC has found.The National Employment Savings Trust (Nest) is being introduced next year by the Government to help people save more for their retirement.

It will involve workers who are not already a member of a company pension scheme, paying 3 per cent of their salary into the Nest fund for their retirement. There will be tax relief on contributions and over time employers will be compelled to pay into the scheme. HSBC found that 23 per cent of people, when told about Nest, said they didn't like the idea of some of their wages being paid into the scheme. David Wells, the head of investments, pensions and savings at HSBC, said: "Nest is a low-cost pension scheme and will help people save more for their retirement. But it is clear there is more to be done to tell people how it will benefit them."

Concerns have been voiced that many workers will opt out of Nest due to the cost, and that firms may close more lucrative pension schemes and shunt staff into the cheaper Nest system.

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