MP calls for rethink on Nest curbs
Gregg McClymont, shadow pensions minister, has called on the government to stick up for UK savers by removing restrictions on its workplace pension scheme.
His comments came in response to the government’s rebuttal of recommendations from the work and pensions committee to immediately remove the cap on contributions and ban on transfers to the National Employment Savings Trust.
The Labour MP for Cumbernauld, Kilsyth and Kirkintilloch East, criticised the government for not listening to the select committee’s unanimous call to “set Nest free” and played down the coalition’s argument that doing so would break European Union rules on state aid.
He said: “EU state aid rules no longer apply to Nest. The government can and should remove the Nest restrictions.
“There are strong grounds for the independent trustees of Nest obtaining their own legal advice. The restrictions on Nest reduce the economies of scale it can achieve. This raises the cost of the administration of pensions to all existing members.”
Allan Maxwell, director for Glasgow-based Corporate Benefits Consulting, said: “I’m against a transfer ban. Individuals should be able to transfer their funds in and out of Nest.
“One issue we have is people end up with lots of small pots and want to combine them to know where everything is. Some might want to transfer all their money into Nest, while others might want to transfer it out, so I’ve never been happy with that restriction.
“As far as contribution cap is concerned, it’s a bit of a red herring because anyone wanting to contribute more than the upper level and earning that much should not be in Nest in the first place.”
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