NEST comments on FCA annuities review

Commenting on the findings of the Financial Conduct Authority's review of the annuities market, John Taylor, managing director of customer and proposition at NEST says:

‘We welcome the conclusions of this review, which highlight the importance of savers getting value for money from their retirement pots. We particularly welcome the focus on the issue of converting small pots into income. Many savers introduced by automatic enrolment will typically have small pots for some years to come. We believe it’s important that the FCA and TPR work together to ensure that these savers aren’t penalised when they come to buy an annuity.

‘NEST has a panel of providers who guarantee to provide retirement income products on pots of £1,500 and above, which means that many members who may not otherwise have had the choice of buying a retirement income now have that option if they want it. We keep our approach under constant review and will evolve it in line with best practice and to reflect what our members need.

‘We also highlight to members that they can shop around, and provide them with clear information that will help them to explore their options and make an informed choice.’

Key facts about NEST:

The government is currently introducing reforms that mean employers will have to automatically enrol most of their workers into a workplace pension scheme that meets or exceeds certain standards. They’ll also need to make a minimum contribution for many of these workers.
NEST, which was established by government as part of these reforms, is a national defined contribution workplace pension scheme available to all employers to use to meet their new duties. It is designed around the needs of people who are largely new to pension saving, with clear communications, low charges and easy online tools and services. It is run as a trust-based scheme, on a not-for-profit basis, and the trustee has a legal duty to act in its members’ interests.
NEST has a public service obligation to accept any employer (whatever their size) who wants to use the scheme to meet their duties, as a sole scheme or alongside other provision.

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