NEST Trustee welcomes lifting of restrictions and confirms price level for transfers

On 2 March the NEST Trustee confirmed that, when the restrictions on transfers into and out of NEST are lifted (1 April 2017):

• there will be no change to the current flat 0.3 per cent AMC applied to funds transferred by members who want to move money into their NEST account from other schemes
• as currently, there will be no exit charge for members who want to transfer their NEST pot to another scheme.

The limit on contributions into NEST will also be removed from 1 April 2017.

NEST Chair Otto Thoresen said:

‘We welcome the lifting of these restrictions. NEST is playing an important role in auto enrolment. We’re here to make sure that all employers have a good quality scheme open to them for auto enrolment, particularly for workers who haven’t had access to a workplace scheme before.

‘It’s vital that small employers are able to choose NEST for auto enrolment without barriers. Employers told us that NEST’s contribution cap and restrictions on transfers would have made this difficult because they do not have the resources to run multiple schemes, so the removal of these constraints is welcome.

‘As many of our members are saving into pensions for the first time as a result of auto enrolment we expect the number of transfers to be small and the transfer values to be modest in size.

‘The Trustee has decided that it will continue, as now, to apply a 0.3 per cent AMC on funds transferred. Our priority is to enable members with modest retirement savings to consolidate them in one place and to get good value for money. Members who want to transfer their pots out of NEST won’t be charged to do so.’

The current annual contribution limit and restrictions on transfers in and out of NEST will be lifted from 1 April 2017, following a government consultation in 2012 and subsequent changes to the NEST Order and Rules.

Notes to editors

• DWP published a Written Ministerial Statement on 2 March

Prior to the restrictions on transfers being lifted, transfers into and out of NEST are allowed in the following circumstances:

• NEST members are allowed to transfer in pre-vested rights – these funds are known as cash transfer sums, and do not count towards the annual contribution limit
• transfers out are allowed from normal minimum pension age (age 55) for the purposes of consolidation
• pension credit transfers, arising from a pension share on divorce, are allowed and do not count towards the annual contribution limit
• where a member satisfies the trustee that they are suffering from incapacity, they can transfer before age 55.

From 1 April 2017, any NEST member can transfer money into or out of NEST.  As is currently the case, in most circumstances a minimum transfer size (£50) is required.