Defined Contribution  

Pension switching is rife at Nest

Pension switching is rife at Nest

The government-backed workplace pension scheme National Employment Savings Trust (Nest) has seen a five-fold increase in members moving their pots away from the provider.

According to its annual report, published yesterday (July 11), the scheme registered 16,015 transfers out during 2018-19, up from 3,461 in the previous year.

The increase was even higher in pension switching from other providers into Nest, with 10,087 transfers in registered in the year, compared with 1,552 in the previous year.

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Nest members moved £17m out of the pension fund to other defined contribution schemes, while inflows stood at £69.6m.

Nest joined Origo's pension switching platform in late 2018, which cut the time it takes to carry out a transfer.

Before joining Origo, pension switching at Nest took an average time of less than 50 days, with more than 50 per cent taking less than 30 days.

But Origo Options Transfers has an average transfer time of 11 calendar days, with 85 per cent of transfers completing within this timescale, although firms' transfer performance can vary from minutes to weeks.

Further product improvements in this area at Nest are planned in 2019/20, the provider stated in the report.

Overall, Nest ended 2018-19 managing £5.7bn on behalf of approximately 7.9m members. This compared with £2.7bn and 6.4m members in the previous year.

Helen Dean, Nest’s chief executive officer, said: "As our members become used to saving into a pension, we have deepened our understanding of their needs and how we can work with them to support their retirement plans.

"This has led to trialling new approaches to engagement, such as personalised video messages to members.

"Our focus is to build upon the success of auto enrolment and ensure we’re helping people achieve the best outcome in retirement."

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