• Text size      
  • Send this article to a friend
  • Print this article

Calls for rules on pensions saving to be relaxed

THE Government should loosen rules for the National Employment Savings Trust that forms the centrepiece (Nest) of its plans for pension auto-enrolment, according to the work and pensions committee chaired by Aberdeen South MP Dame Anne Begg.

Dame Anne said the Government should lift the cap on contributions and allow transfers in and out, so employers do not opt for rival but potentially more expensive private schemes with fewer restrictions.

The introduction of auto-enrolment, which means employees have to actively opt out of contributing to a pension, began in October.

"Since auto-enrolment began, the case for lifting the restrictions has become even more powerful, and the need for action more pressing," Dame Anne said.

"For auto-enrolment to continue to work successfully, Nest must be allowed to thrive."

The Nest scheme is designed to be low-cost and simple to use. Thousands of companies are expected to make use of it over the coming six years as millions of private-sector workers begin saving for retirement for the first time.

The committee wants a relaxation of rules that cap contributions to a member's scheme at £4400 currently and prevent members from transferring money in and out to other schemes.

Dame Anne said: "The cap on annual contributions to Nest means that employers can't opt for Nest for their higher-earners or if they want to make more generous contributions. "

Groups including Age UK, Which?, the Federation of Small Businesses and the Trades Union Congress have already written to pensions minister, Steve Webb, calling for the restrictions to be relaxed.

Contextual targeting label: 

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.