Workers are in danger of being shut out of the best value pensions unless the government lifts restrictions around a scheme which is key to its landmark retirement reforms, a committee of MPs warned today.
The Commons work and pensions committee said that caps on annual contributions into Nest (National Employment Savings Trust) and that a ban on transfers in and out of the scheme must be scrapped “as a matter of urgency”.
It warned that the current rules would force employers to plump for alternatives to Nest, which are more flexible but do not have the same obligations placed on them to keep costs low.
Nest was set up as a not-for-profit option to fill gaps in the existing market as the government rolls out its automatic enrolment programme which will eventually see up to ten million people placed into workplace pensions.
However, there have been widespread calls for the rules around Nest to be relaxed, amid concerns that many employers will be unable to use Nest as a single pension for their whole workforce.