NEST stands for National Employment Savings Trust. Launching on April 1st 2011, over the next five years, NEST will become compulsory for all businesses that do not offer a pension scheme to their employees.
If you employ staff, you need to know about NEST.
Key Facts about NEST for employers:
- NEST is only compulsory if a company does not have a suitable pension scheme in place
- Employees earning more than £7475 a year will automatically be enrolled
- Lowers earners have to choose to ‘opt-in’
- Within the NEST scheme employees contributions will be matched pound for pound by contributions from the employer and the Government
- Involvement in the scheme is voluntary from April 1st 2011
- By October 2012 large employers (over 30,000 employees) will have to auto-enrol employees eligible for a pension in to a qualifying scheme and make at least a minimum contribution
- By 2013 the same will apply to all employers with over 350 staff
- By July 2014 the same will apply to all companies with 50+ staff
- By September 2016 it will apply to all employers
- Nest is one of a number of ‘qualifying’ schemes- it is not the only solution.
Key Facts on contributions
- Initially employees will contribute a minimum of 1% of their salary
- And employers will contribute a minimum of 1% of their salary.
- The Government’s contribution will be the tax relief.
From October 2016
- Contributions increase will rise to 5%
- At least 2% will come from the employer.
- By October 2017 contributions will settle at 8%
- At least 3% of this contribution will be from the employer and 5% from the employee.
Whilst Ovation wholly supports saving for retirement, we would ask the question is NEST the right environment and could employers and employees do better?
How can you decide if NEST is right for your business? Call us, we’ll come and help you and your employees understand the options that are available for you all.
