Private providers can't fill Nest gap warns ABI
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The Association of British Insurers says it is unlikely that providers could fill the gap if the National Employment Savings Trust does not go ahead, even if auto-enrolment parameters were restricted.
Money Marketing revealed earlier this month that the Government has been holding talks with providers over the feasibility of an industry-led replacement for Nest.
The Government could save £575m over 10 years if it chooses not to go ahead with the second stage of the contract with Tata in October.
But in its submission to the Department for Work and Pensions’ review of auto-enrolment, the ABI says: “The rationale for Nest is not that the industry does not want to serve certain sections of the market but that, for some employers, the industry will only be able to do so on terms that are either unacceptable to the employers or unacceptable to politicians and/or regulators.
“This means, as things stand, it is unlikely that the private pension industry could fill the gap if Nest did not go ahead. It would remain unlikely, even if the parameters for auto-enrolment were adjusted, as proposed in this submission.”
The ABI wants the current auto-enrolment band of age 22 up to state pension age to be retained and believes no one should be excluded based on the size of firm they work for but auto-enrolment should only apply to those earning £10,000 or more a year.
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