View more on these topics

Nest review suggests contribution cap should be scrapped in 2017

The Government could remove the £3,600 Nest contribution cap in 2017 following a recommendation from the auto-enrolment independent review team.

In it’s final report, David Yeandle, Paul Johnson and Adrian Boulding told the Department for Work and Pensions legislation “should make clear” that the cap on payments into Nest, which is based on 2005 prices, will be removed when all employers have been phased in.

Institute for Fiscal Studies research fellow Paul Johnson, who led the three-man review team, says: “The cap should be kept uprated until 2017. After that, there is a case for removing it. It is important the Government does not give the impression that £3,600 is enough.”

However, Standard Life head of pensions policy John Lawson (pictured) argues the limit, which he says will be about £5,000 when the scheme is up and running, is “largely irrelevant”.

He says: “If you look at the best contribution rate of 12 per cent, you’d have to earn well over £40,000 to reach the limit. The vast majority of people will be under the limit.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Jennifer Nicholls 27th October 2010 at 4:58 pm

    Well my kids could have worked that one out. When will they take proper advice from us, people who work in the industry.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com