National Employment Savings Trust

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NEST is effectively a compulsory pension scheme into which all employees are to be enrolled with a view to providing a retirement pension in due course in addition to the State pension.

Employers must automatically enrol their employees (between the ages of 22 and the state retirement age who earn more than £8,105 p.a.) into NEST unless they already run a pension scheme with comparable benefits. For employers with 250 or more employees the commencement date is October 2012. Where the number of employees is between 50 and 249 the commencement date will be some time in the year ended 31 March 2015. For those employers with less than 50 employees the commencement date will be between 1 June 2015 and 1 April 2017.

All qualifying employees must be automatically enrolled into NEST unless they specifically opt out or there is a comparable pension scheme arrangement already in place. Initially employers will have to contribute at least 1% (of salary) to the scheme but this will increase to 2% in October 2017 and 3% in October 2018. Employee contributions will be required at similar rates (employees will receive 20% tax relief at source on their contributions).