Why is the Nest Pre-retirement Fund closing?

What’s happening?

We’re closing the Nest Pre-retirement Fund on 13 December 2021. Anyone who’s selected this fund will be moved into a different fund on that date. We also won’t be accepting any new members into this fund after 30 October 2021.

Why is the fund closing?

The Nest Pre-retirement Fund was created 10 years ago when most people bought annuities once they reached retirement age. It was designed for members close to their retirement date who wanted to take their pot as regular retirement income rather than withdrawing the full amount. As regulations have changed and people have much more choice at retirement, fewer people are choosing to buy annuities – and correspondingly, there’s much less need for the Nest Pre-retirement Fund. We therefore don’t believe it meets the needs of our members. 

I’m in the Nest Pre-retirement Fund. What will happen to my money?

Our team of experts has considered a number of factors when looking at where to move your money, including your age, the potential impact on your savings, and the level of investment risk that’s appropriate for your age. So if you’d rather let us handle the admin, we’ll automatically move your savings into one of our award-winning Nest Retirement Date Funds on 13 December.

These flagship funds are set to the year we think you’ll retire, so we can adapt our investment strategy to your age and life stage. Our aim is to grow your savings to give you a nest egg to rely on in future.

If you’ve passed your Nest retirement date, we’ll move your pot into the post-retirement phase of the fund. This helps protect your money from falls in the economy and financial markets, and keeps it ready for when you’ll need it.

What do I need to do?

You don’t have to do anything at all if you’re happy for us to put you in the fund we think is right for your needs. However, please take a moment to check the fund details and that your Nest retirement date matches the year you plan on stopping work – this helps us make sure your money is ready for when you need it. 

What’s the difference between the Nest Pre-retirement Fund and Nest Retirement Date Funds?

Unlike the Nest Pre-retirement Fund, our team of experts adapt the Nest Retirement Date Fund investment strategy in line with your age and with wider economic conditions. It’s designed to help manage your money appropriately to your age, rather than just protecting your pot from any dips in the market.

Over 99% of our members are in a Nest Retirement Date Fund. Not only do they adapt to your retirement age, they’ve won several awards for their investment strategy – including for their responsible approach. After all, saving for your future means having a future worth saving for. 

What year am I set to retire?

When you join, we automatically set your Nest retirement age to your State Pension age. However, your plans are as individual as you are. And as your circumstances change, so will your plans for retirement. 

We strongly recommend you think about when you’re likely to start withdrawing your pot so you can keep your Nest retirement date in line with your plans for the future. This helps us manage your money so it’s ready for when you need it, and to invest it appropriately at each stage of your life. Think of it like a plane journey – you don’t want to land the plane until you’ve reached your destination.

If you’ve thought about your future plans, it takes minutes to update your Nest retirement date once you’ve logged in to your online account. 

Can I switch to a different fund?

Of course. If the Nest Retirement Date Fund isn’t right for you, it couldn’t be easier to select a different fund. Simply log in, select ‘Retirement pot’ from the top navigation bar, then ‘Fund choices’, then choose the fund that’s right for you.

You can find full details on how to switch funds in our help centre.

Before making any big financial decisions, it may be worth discussing your options with an independent financial adviser.

How long does it take to switch to a new fund?

It may take up to five working days for the changes to show in your account. Once you’ve switched, all the money in your pension pot, as well as all the money from your future contributions will be invested in your new fund.

Does it cost anything to change funds?

Switching is completely free, whether you do it now or in the future.

What happens if I don’t do anything?

We have it all in hand and will move you safely and automatically on 13 December. You can log in to your Nest account to view your new fund and your pot, update your details or your retirement date. You can and always will be able to change or switch to another fund in line with your personal preferences and needs.

Could I lose money by switching funds?

To change your pension fund, we take all of your money out of your current fund and invest it straight into the new one. As the financial markets change in price all the time, there may be a slight difference to the value of your investments. However, it shouldn’t significantly affect your savings.