I am pleased to announce the Government intend to remove the annual contribution limit and transfer restrictions on National Employment Savings Trust (NEST), to ensure all businesses can be confident that this low-cost and easy to use scheme is among the options they can choose to enrol their work force.
NEST was set up to support automatic enrolment. It was designed to provide a quality, low-cost pension scheme focused on a target market of low to moderate earners and smaller employers.
NEST currently has over 1.5 million scheme members and is working with over 8,900 employers. The scheme has a public service obligation to accept any worker automatically enrolled by their employer and in recognition of this, NEST receives state aid. To balance any competitive advantage there are a number of constraints including an annual contribution limit and restrictions on transfers.
In their response to the call for evidence on the impact of the annual contribution limit and the transfer restrictions on NEST, (Cm 8668) published in July 2013, the Government confirmed their intention to lift these two constraints in April 2017. Since then, the European Commission has considered and approved the modifications to the state aid case for NEST. Full details of the Commission’s decision are available here: http://ec.europa.eu/competition/state_aid/ cases/251386/251386_1567249_105_2.pdf
Accordingly, we will commence a short technical consultation on draft legislation, this autumn, to remove the annual contribution limit and the bulk transfer restrictions on 1 April 2017. We also retain the option to remove the individual transfer restrictions, from 1 October 2015.