NEST: removal of the annual contribution limit and transfer restrictions
26 January 2015
Draft legislation has been published to remove the annual contribution limit and the transfer restrictions on NEST.
The National Employment Savings Trust (NEST) was set up alongside the introduction of automatic enrolment to be a pension provider which any employer would be able to use for any worker. To prevent NEST from having an unfair advantage over commercial pension providers that do not have government backing, various constraints were placed upon it including an annual contribution limit and transfer restrictions.
Following consultation from October to December 2014, draft legislation has been published to remove the annual contribution limit and the transfer restrictions on 1 April 2017. The Government also retains the option to remove the individual transfer restrictions earlier, from 1 October 2015, to coincide with the introduction of automatic transfers.
The National Employment Savings Trust (Amendment) Order 2015 was laid before Parliament on 16 December 2014. The draft Transfer Values (Disapplication)(Revocation) Regulations do not need Parliamentary approval and subject to approval of the amendment order, these will be made in spring 2015.