View more on these topics

Nest’s restrictions to be scrapped in 2017


Nest’s contribution cap and transfer ban will be lifted in 2017, the Government has announced.

Pensions minister Steve Webb has today published a written ministerial statement setting out plans to remove the £4,500 annual contribution cap and ban on transfers in and out of the scheme in four years time.

He says: “In line with the recommendations of the independent Making Automatic Enrolment Work review, I intend to legislate as soon as Parliamentary time allows to lift the contribution limit from 2017. 

“This will give employers the certainty they need that Nest will continue to be an appropriate scheme for them and their workers when minimum contributions rise, or should they choose to contribute more.

“With regard to individual transfers, we agree that Nest should be part of the automatic transfer solution for which we are currently legislating. 

“Therefore we intend to lift the restrictions on individual transfers in and out of Nest to coincide with the start of the ‘pot-follows-member’ regime.

“The ban on bulk transfers will remain in place until the end of the main roll out period for automatic enrolment in April 2017, when it will then be lifted.”

Nest managing director of product and operation Helen Dean says: “We are pleased the Government has decided that from 2017 members and employers will be able to use Nest as they would any other pension, with no specific restrictions on the amount they can contribute or the ability to transfer in and out.”

Association of British Insurers director general Otto Thoreson says: “This is a sensible way forward which will command the support of the industry. 

“Automatic enrolment has been a success story so far thanks partly to the strong partnership between insurers and Nest. We look forward to building on this as we focus on the critical challenges of encouraging people to stay enrolled and save more.”

Trade union the TUC says it is “disappointed” the transfer ban will not be lifted sooner.

TUC general secretary Frances O’Grady says: “Any employer can now confidently choose Nest as a single supplier as the contribution limit will end just as full contributions are payable under the phased introduction of auto-enrolment. 

“Despite the strong lobby to keep Nest restrictions from some commercial providers, the minister has come down on the side of consumers.

“But we are disappointed that the ban on pot transfers is not happening more quickly. We would have preferred an early date to help those who move jobs, as well as Nest members with pots from earlier savings in poor legacy schemes.”


George Osborne hints at Tory pledge on tax rises after 2015

Chancellor George Osborne today fired the starting pistol on the 2015 general election campaign by strongly hinting the Conservatives would not increase taxes if they are elected. Speaking at the Treasury select committee hearing into the spending review today, Osborne said he believes the 2015/16 spending programme can be met through cuts alone. In his […]

The Technical Quiz: 11 July

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions. Answers below.


Complaints Commissioner rebukes FSA for withholding information

The Complaints Commissioner has stressed the need for “total transparency” from the regulator after it emerged the FSA withheld information relating to a complaint against it. Complaints Commissioner Sir Anthony Holland has published his annual report for 2012/13, to coincide with the final FSA annual report published earlier this week. Holland investigated complaints against the […]

Sticking to valuation discipline when investing in China

Journalist Alexis Xydias discusses the opportunities – and potential pitfalls – of investing in China with Artemis fund manager Peter Saacke. With Peter holding significant positions in China in the Artemis funds he manages, journalist Alexis Xydias quizzes Peter on the risks of investing in Chinese stocks – including over-valuations, margin trading and financial reporting issues. Click here for video


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. I look forward to an insurance company or pension provider taking the government to court as surely Nest is effectively a monopoly.

    After all the only product on the market that now allows for consultancy charging is Nest after all isn’t the 1.8% fee that it levies on contribution effectively a consultancy charge.

    Maybe AVIVA, Standard Life, Scottish Widows and others should be queing up to take the DWP to court as surely the proposed legislation to ban consultancy charging makes the Nest charging structure illegal.

    I really wish Steve Webb would get some decent advise before proposing stupid legislation. By the way there is only an estimated 100,000 jobs plus involved in the present pension industry when you add up admin staff and advisers so it’s not as if this is a small industry to tinker around with.

  2. I agree with Peter’s sentiments – Mr Webb should get some proper advice himself before making a further mess of the entire industry (although he probably isn’t taking any advice, as he believes no employer needs to pay for advice as NEST is so simple!)
    He also believes employees will love auto-enrolment as it will be – in his words – “a free pay rise” when in fact employers will simply give their staff no pay rise, owing to the need to make the NEST contributions and the additional admin costs they will incur (one report stated that the entire cost savings that the Gov’ts drive to reduce red tape have been wiped out in one go by Auto-Enrolment)
    This latest change, alongside the ban on Consultancy Charging, will mean that virtually no advice will be given to anyone about saving for their retirement unless they are self-employed, as it will be a case that NEST is virtually the default option
    Life Offices will be winding down their PPP departments as no new PPPs will be sold (I wonder how many are being sold at present compared to pre-Stakeholder days? The only ones I have sold in the last 5 years have been where someone is consolidating old plans into one new one and then maintaining their contributions – I can’t remember the last time it was new money for a new saver )
    Well done Mr Webb, huge job losses in the UK financial services industry, with jobs created for TATA in India as they monopolise the market with their monopoly on adviser charging.
    The Government have muted making NEST available to the self-employed, so when that occurs we can finally shut down the UK Pensions industry
    They never foresee the actual outcome of their meddlings – believing in their own flawed research – as Mr Cameron said – “Andy Murray winning has given the country a boost” – it’s a good job he wasn’t operated via a Gov’t department, otherwise he’d have struggled to be a ball-boy!

  3. Peter Herd is right, could be massive implications for the IFA sector with NEST becoming the default proposition for the mass market.
    Perhaps RDR had a second agenda after all!!!

  4. I agree with Peter Herd for once. You are absolutely right.

  5. If it is the Holy Grail and so good perhaps we can give it as the only option for MP’s and all other public sector workers and save the country a fortune.

  6. All those pension liberation firms must be rubbing their hand switch glee…. I agree with Peter Herd, this is a mess, if it allows TFS in and out, then it will compete directly with GPPs in which case it is a monopoly. Rules changing half way through. How many years did they have to get stakeholder right? And failed, then redesign and fail at launch and now more tinkering. A period if stability if 10 to12 years might be nice.

  7. The government policy is clear, the Nationalisation of Personal Pensions.

    Once Nationalised, the ability to opt out of auto-enrollment will be removed.

    Once you have no choice but to join NEST the government can remove tax relief as an incentive to save in a pension.

    Once everyone is in NEST the government will not be able to resist directing investments into GILTs. QE by the back door, pension funds used to fund grandoise worthless government schemes such as HS2 etc

Leave a comment