Aviva has claimed that unless legislation is relaxed so the private sector can offer pensions to lower-earners, the Nest scheme will plough through current pension provision.
Speaking at a Money Marketing pension round table last week, Aviva head of pensions Paul Goodwin said: “I am getting conflicting messages about just how much of a scheme of last resort the Tories would like Nest to be and how much it could creep into the bottom end of current provision.
“If they simplify legislation, we can move down the market a bit because we can take an awful lot of cost out but there will always be a point we will not go to because the economics do not work. There are conflicting views about where that point is and what exactly Nest should aim to do.
“Nest is going for everybody with between £5,000- £35,000 worth of income and then expecting to be complementary to current provision. No it is not, it is riding right through current provision. I think there is a belief that current provision is for high-net worth individuals only and that is simply not true.”
Aegon head of pensions management Rachel Vahey said that Nest will not automatically make people save enough for their retirement.