Government-backed pension scheme Nest will never pay back its rapidly growing DWP loan, say auto-enrolment experts.
Its annual report shows the loan has soared by 30 per cent to £387m, up from £300m 12 months ago.
In addition, an annual DWP grant used to pay off the loan increased from £10.2m to £12.7m this year.
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.”
Chase de Vere auto-enrolment delivery manager Sean McSweeney says: “I can’t see that they’ll ever pay off the loan but the Government has wasted much larger sums of money on things that are less important.”
PensionPlaypen founder Henry Tapper says: “The only way Nest is going to pay off the loan is if it takes on loads of transfers and I don’t think the new chief executive Helen Dean will be aggressive enough.
“It’s like the national debt, they’ll never pay it off.”
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.