MPs have called for "complex" rules governing the National Employment Savings Trust (Nest) pension scheme to be lifted in order to make it more attractive.In a bid to tackle the pension savings crisis, the government is set to automatically enrol millions of workers into a pension scheme from October.Nest was set up as a low-cost pension scheme to help deliver auto-enrolment but the Work and Pensions Select Committee has claimed rules governing the scheme currently render it unable to meet the needs of "all the employers and workers who might want to use it".The committee claimed that there should be no annual limit on how much people can contribute to the scheme as this would result in highly-paid workers being unable to use Nest as their single pension scheme.Furthermore, it suggested that Nest should remove a ban on the transfer of existing pension pots to the scheme.Dame Anne Begg MP, chair of the Work and Pensions Committee, claimed that more people are likely to choose Nest as their pension scheme if restrictions on payments are lifted."Making it easier for employees to bring together the other small pension pots they are likely to have... will help reduce the multiple administrative charges that many people pay and help them to understand the total retirement savings they will have built up," she said.Other proposals from the committee include developing a comparison website for pensions which would help consumers pick the best policy to meet their needs.Michelle Mitchell, charity director general of Age UK, backed the committee's proposals, claiming that they would make "auto-enrolment easier and more cost effective for millions of people on lower earnings and their employers when it comes into effect in October".Under the plans for auto-enrolment, employees and businesses will pay a percentage of their earnings to Nest or workers will be automatically enrolled in an existing company pension scheme instead.
© 2012 Adfero Ltd. All rights reserved. Any views and opinions expressed in news articles are not those of Just Retirement Limited. News supplied by Adfero DirectNews.
What are your choices?