Nest mulling move away from lifestyle strategy

The Liberal Democrat pensions minister claimed that the government-established default auto-enrolment pension scheme was consulting on whether to delay derisking portfolios until later in investors’ lives depending on whether they choose to leave some of their fund invested after retirement.

Mr Webb added: “Moving out of higher risk investments sooner could be less of a good idea.”

Tim Jones, chief executive of Nest, said: “The recent Budget changes are significant and we want our members to be able to access their retirement pots in ways that help them meet their aspirations and provide the flexibility they may need or want in later life.

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“Finding solutions that are in our members’ best interests is our main concern.”

Last month, Nest announced plans to consult with industry, government, consumer bodies, academics, commentators and others over the course of 2014 to ascertain how best to respond to the increased flexibility for pensions announced in March’s Budget.

Mr Jones confirmed the organisation did not expect to publish its findings until early 2015.

He added: “The bottom line is there is now a lot more choice for savers. And what we do know is that everyone’s circumstances are different.

“No matter what changes we decide to make, we need to be mindful and sensitive to individual personal circumstances and to communicate the implications with members clearly and at the right time for them.”

Adviser view

David Smith, wealth management director at London-based Bestinvest, said: “This makes a lot of sense. The majority of workplace pensions go into lifestyle funds, which automatically puts more into corporate bonds and comes out of equities as you approach retirement, which was a good hedge for annuities.

“Now, few people will be buying annuities and the whole logic behind lifestyle funds has changed. There is more argument for staying invested in equities and even higher-yielding assets for longer. I suspect other pension schemes will eventually follow suit.”