Why it is important to consider what a Defaqto rating tells you about a pension scheme

What does a Defaqto 5 star rating really mean?

Every year, independent experts Defaqto research and analyse the terms and conditions for every financial services product on the market.

Their ratings show the quality, value and comprehensiveness of the features and benefits products provide.

Defaqto Star Ratings for workplace pensions are based on their expert analysis of the 25 most important features to the employer and member. The Defaqto experts analyse over 60 schemes, and then set benchmarks for a 1-5 scoring system for each of the assessed features. To achieve a 5 Star Rating the scheme must meet or exceed the benchmark for each of the ‘core criteria’ and additionally, achieve a high number of points in most of the other criteria*.

At Nest, we’re proud to be the UK’s largest workplace pension scheme and that our great service and value for money continues to be recognised - for the seventh year in a row we remain one of only a handful of schemes to have been awarded a 5 star rating from Defaqto.

Being independently recognised for delivering one of the highest quality workplace pension schemes should give reassurance to our customers that they are with the right scheme. Nest continues to work on your behalf to provide a value for money scheme that focuses on taking less risk yet still delivering some of the best returns in the market.

*Defaqto core criteria:

• Scheme is open to all employees aged 16 to 74
• Employees must be able to view the value of their savings online
• Retirement benefits can be taken in more than one way
• Access to a Sharia fund must be provided
• Access to an ethical fund must be provided
• Scheme can facilitate tax relief on contributions to all employees

Other criteria category groupings:

• Provider and acceptance
• Contributions
• Taking benefits
• Administration
• Investment options

Published 01 September 2022