Simon Holland, an IFA at Surrey-based Enterprise Consulting, highlighted recent comments made by pensions minister Steve Webb, who criticised high pension charges.
However, Mr Holland said the government had created the National Employment Savings Trust, which, apart from a 0.4 per AMC, has a 1.5 per cent charge on contributions for 20 years.
He said: “Literature I have seen claims this works out about 50 basis points, but that’s only for someone who has a particular length of time to go before they anticipate taking retirement.
“Those on a shorter timeframe will be paying a higher level. You’ve got a contract that isn’t as clean as many others out there.”
Mr Holland added: “It concerns me that we have the pensions minister going on about charges and wanting to implement a cap, while the government has given the green light for Nest to implement the sort of charging structure it had been encouraging the industry to move away from for a number of years.
“Nest seems to fly in the face of what the government wants the industry to have.”
Earlier this year, Andrew Oliver, co-director of Kent-based IFA Andrew Oliver & Co, said he was concerned that the regulator was not entirely satisfied with advisers operating a charging structure by taking a percentage of the fund, but said that Nest was employing a similar charging structure, although it does not use consultancy charging.
Graham Vidler, director of communications for Nest, said: “Nest does not use consultancy charging, which is a fee paid from members’ pots to advisers for advice given to an employer. Nest is run on a not-for-profit basis by an independent trustee. The combined charge – equivalent to 0.5 per cent AMC for most members – is used to cover the costs of running the scheme and administering members’ pots. Nothing else.”