MPs argue that taxpayers’ money will be spent more effectively if Nest is allowed to target more profitable business on the open market.
In a report into lifting Nest restrictions, published this week, the work and pensions select committee says Nest could make more money from auto-enrolment if its restrictions are lifted now.
The report says: “Removing the restrictions now will help to ensure taxpayers’ money which has been allocated to Nest is used most effectively, in allowing Nest to offer its services to the widest range of employees and to meet the automatic enrolment requirements of all employers who wish to choose Nest as their pension provider.”
The European Commission predicts the UK will lend Nest up to £379m to set up the scheme. In July, figures showed the Government had lent £171m to Nest so far.
Saga Group director-general Ros Altmann says: “Taxpayers have funded the initial set-up of Nest but the idea is that it should become profitable enough to repay the taxpayer loans.
“The cost can be reduced significantly if Nest can attract more assets. Given the current fiscal constraints, the taxpayer clearly has an interest in ensuring its costs are minimised.”