The Federation of Small Businesses has urged the Government to make Nest’s success a priority as pressure grows on ministers to scrap the scheme’s restrictions.
Under current plans, member contributions to the Government-backed scheme will be capped at £4,200 and transfers in and out will be banned.
The restrictions are due to be reviewed in 2017 but a report from the work and pensions select committee says they should be removed “as a matter of urgency”, provided the loan agreement between the Government and the EU allows this to happen.
At TheCityUK’s pension conference last week, FSB policy chairman Mike Cherry said: “Most small firms will choose Nest as their company scheme, so our primary concern is whether Nest will be able to reach the critical mass it needs. We call for this to be a Government priority. We also want to see the contribution cap removed and Nest to be able to accept transfers.”
Age UK head of public policy Jane Vass said: “I am concerned that Nest is hamstrung by the cap on contributions and the ban on transfers. We would like to see those restrictions removed as soon as possible.”