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NEST (National Employment Savings Trust)
NEST is the new low-cost pension scheme which will be available for any employer to use to meet its new legal duties of automatic enrolment when they start to apply from October 2012.
NEST has been specifically designed to meet the needs of those who are largely new to pension saving - both individuals and their employers.
It will operate as a trust-based occupational pension scheme run by NEST Corporation, a trustee body.
Employers will be able to use NEST in a variety of ways. It could be the only scheme an employer offers their workers or it can sit alongside another scheme they already have. For example, NEST might be used as an entry level scheme where there is an existing scheme which has a waiting period, or as a base scheme to ensure compliance with the new employer duties, using another scheme to pay in additional contributions.
NEST has been designed so as to be a simple to use and easy to administer. It will primarily be an online service.
An individual's membership of NEST is portable, meaning they can keep the same retirement savings pot throughout their working life, even though they may work for different employers from time to time. In addition, more than one employer can contribute to a member's NEST retirement savings pot at the same time, making it suitable for those with more than one current employment.
Contributions to NEST are subject to a cap of £4,200 per year (subject to annual revaluation in line with average earnings).
Author: Georgina Beechinor