Pension experts say Nest looks likely to survive the Government’s comprehensive spending review despite earlier speculation that the Treasury wanted to scrap it in favour of a cheaper alternative.
Industry sources say that Nest spokespeople are accepting speaking invitations for later this year for dates after a decision about the future of the National Employment Savings Trust is likely to have been made.
In July, independent pension policy adviser Ros Altmann said that the Treasury was having second thoughts about Nest over fears that it would lose money because of the increased cost of tax relief.
This came amid widespread speculation that Nest was likely to be scrapped following the Department for Work and Pensions’ review of Nest and auto-enrolment, due to report at the end of this month.
In August, the Government held talks with providers to investigate the possibility of scrapping Nest in favour of a private sector solution which could save the Government £575m over 10 years.
But the Association of British Insurers said it is unlikely that product providers could fill the gap.
Cicero Consulting director Iain Anderson says: “The Government does not want to reinvent the wheel and have another pensions commission, therefore it is likely that Nest will get the green light, albeit with the public spending considerations in mind.”
Standard Life head of pensions policy John Lawson says: “My sense is that Nest will still be required.”
The Government will announce its decision in the comprehensive spending review on October 20.