Nest’s loan from the Department for Work and Pensions loan has soared by 30 per cent to £387m in just 12 months, its annual report shows.
To the end of March 2015 the auto-enrolment scheme’s loan stood at £387m, up from £300m a year ago.
A Nest spokeswoman says: “The loan covers set-up and operational costs incurred in the period before charge revenues meet the full costs of the scheme.
“As the only provider required by law to be open to any employer, we have to be ready for very high volumes. That means we’ve had to continue developing our system capacity and processes to meet changing demands.”
However, Nest’s income from member contributions and annual management charges nearly trebled as the scheme took on 9,000 new employers and around one million members.
It received £5.9m in the year to April 2015, compared to £1.9m in 2013/14.
Outgoing chief executive Tim Jones was paid a total of £250,000 in 2014/15, including a £20,000 bonus. The previous year he earned £315,000 including an £81,000 “contractual terminal” bonus.
Nest has a 0.3 per cent annual management charge on each member’s fund in addition to a 1.8 per cent charge on each new contribution.
The scheme now has over two million members, compared to around one million in 2013/14, and provides pensions for over 14,000 employers, compared to just under 4,700 last year.
Assets under management have increased to £420m up from £104m last year.
Over 99 per cent of members are invested in Nest’s default fund.
Chairman Otto Thoresen says: “I’m pleased to report that Nest has been performing well, successfully managing millions of pounds on behalf of its members and helping thousands of employers set up their schemes and meet their duties.
“But the number of employers coming under the auto enrolment duties increases exponentially from now until 2018, so the hard work has only just started. Our number one priority is making sure we are prepared for the volumes to come.”