NEST Advice Ashford, Maidstone, Canterbury Kent

Under NEST every employer will be compelled to contribute 3% of payroll to every eligible employee's pension unless the individual employee opts out. This new plan is being phased in between 2012 and 2017. Larger companies have to meet onerous deadlines although smaller firms get more time. However every employer needs to start planning now for how best to meet the challenge.

The only exceptions will be if employees individually choose to opt out of Nest or if the employer has already provided something better...

The recession has exhausted the public purse and there is already talk of a state pension age of 70. The challenge for employers is to plan now for the introduction of nest and Auto Enrolment. Given the state of government finances the biggest single issue for business is to educate staff to understand the critical importance of putting money aside to fund lifestyle after employees stop work. Our experience, with clients such as SeaFrance, clearly demonstrates that employees require personal, independent financial advice. Facts & Figures has been advising employers on providing for their staff for 15 years. Our aim is to foster proper understanding of the issues through clear communication at all stages of the process.

Nest pensions will be introduced in April 2012 as a "new way to save". They will effectively be personal pensions, run on an occupational basis and administered by employers. All employees will be automatically enrolled into NEST or an alternative plan as long as they are aged between 22 and the state pension age; they earn more than the Primary Threshold (£7,475 per annum proposed for 2010/11); their employer does not already offer a pension scheme with benefits equal to or greater than NEST.
There are investment funds to choose from (including environmental and ethical options), as well as a default fund for those not wanting to make a choice.
Once an individual has begun investing in NEST, it will stay with them throughout their career, regardless of when they change employers. The aim will be to accrue a fund which will provide an income in retirement. As with traditional money purchase pensions the policyholder will not be able to access the funds before age 55 when there will also be an option to take 25% of the fund as tax free cash. The Government is naturally keen to maximise the benefits to members, and therefore wants charges to be kept to a minimum – ideally below 0.3%. As far the contributions are concerned, the Government intends for employees to pay 4% of their earnings, employers 3%, while at the same time contributing an extra 1% itself via basic rate tax relief.
This 8% minimum contribution will be phased in over a three year period (for example in 2012, employers will only have to pay in 1%).

Government NEST leaflet.

Independent financial advice for employers and business on NEST throught Kent (Maidstone, Ashford, Canterbury) the South East & nationally. Contact Us for further information.

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