What can pension savers
learn from buying a car?

People can spend weeks and months agonising over the purchase of a new car, which makes sense. It’s typically a huge financial expenditure with people often spending £10,000s.

To put this in perspective, a UK worker, who starts saving at 22, could have more than £100,000 saved in their pension by the time they retire. That’s a lot of money.

So, let’s consider questions someone would typically ask when buying a car:

• What’s under the bonnet?
• How safe is it?
• What’s its miles-per-gallon?
• Will it perform in all conditions?
• Am I getting value for money?

These considerations revolve around getting the right deal. That means being confident that they know the options available on the market and pitfalls to avoid.

But the last one, on value for money, is key. Most people would typically consider it for all purchases they’d make and the same should go for a pension.

Savers should be asking their pension provider about the types of things they’re being invested in, how much they’re being charged, whether their providers invest responsibly.

All these questions can help savers come to that ultimately key decision – are they getting value for money?

Pension schemes need to be working hard for their members' money. For example, at Nest we can see that high inflation could be here for a while and we want to invest into things that are more resilient to that.

So we’ve just appointed a team of experts to help us invest in private equity, as part of our overall default strategy blend. Private equity is traditionally more expensive but can be one of the most lucrative types of investment.

We’ll be including private equity into our investment strategy at no additional cost to our members, having used Nest’s reputation and scale to negotiate really good value for our membership.

At Nest, we’re always looking to find ways to drive strong investment performance, even in difficult market conditions, whilst keeping costs as low as possible.

Many people became pension savers for the first time through auto enrolment. Saving with the right pension company may be one of the most important financial decisions they’ll make.

Everyone should make sure that the pension they’re investing in can go the distance.

Published 15 July 2022

Here’s a few links for you to explore if you’re interested to learn more about your Nest pension.