Nest growth continues as it renews its commitment to customers

Nest has today published its 2022/23 annual report and accounts for Nest Corporation, to add to the Nest pension scheme report and accounts published at the end of July. The reports highlight the continued growth of its stable, high-quality pension scheme and Nest’s renewed commitment to delivering the best outcomes for its customers, through digital transformation.

Commenting on the reports, Helen Dean, Nest’s Chief Executive Officer, said:

“Nest has grown from a standing start to become one of the largest pension schemes in the UK – we take care of pensions for a third of the UK’s working population and we’re forecast to have £100 billion assets under management by the end of the next decade.

“We have achieved this success by always taking decisions in the best interests of our members, with their long-term outcomes, as our utmost priority.

“During the year, we took the decision, alongside Atos BPS, to end the partnership which would have seen them become our future scheme administrator. However, the two years spent working together established strong foundations for the next chapter in our digital transformation.

“Our focus for the next 12-18 months is in developing an even greater purpose-led, customer centric organisation. We are ready to deliver what is needed for the pensions dashboard project, and are now developing an app for our members. With this they will be able to have Nest in their pocket, and enjoy a truly tailored and personalised experience of their pension pot.

In collaboration with our partners, including TCS, we will further evolve our role and services for our members. We deliver a great service now, and it’s going to get even better.”

Brendan McCafferty, Chair of Nest Corporation, said:

“As households deal with inflation and the cost-of-living crisis, uncertainty and change have continued to affect the lives of UK citizens through 2022 and into 2023. Many are experiencing difficult choices between competing priorities. Knowing they are saving with us to secure their financial future in retirement can hopefully provide some comfort and peace of mind for our members when thinking about their future.

At Nest, we care about how our work will shape the future for the pensions industry and, most importantly, for Scheme members. As Nest continues to grow, we remain singularly focused on our members’ best interests.”

Nest has continued to demonstrate strong financial performance during 2022/23. The Scheme’s membership grew from 11.1 million as at March 2022 to 12.0 million at March 2023. Growth in membership alongside high salary inflation within the UK labour market enabled member contributions to out-perform expectations.

With around 99% of its 12 million members remaining in its default investment strategy, Nest recognises the importance of using its scale to help deliver for its members strong, consistent investment returns over the long-term.

The 2040 Nest Retirement Date Fund, which currently represents the growth phase of the default strategy, has delivered annualised returns (net of the annual management charge) of 7.3% over the past decade, outperforming its objective of 5.8%.

Information contained within the reports include (as of 31 March 2023):

• Nest was managing £29.6 billion on behalf of 12 million members and 1.1 million employers. This is compared to £24.4 billion, 11.1 million members and 975,000 employers for the same time last year.
• Each month on average Nest received £543 million in new contributions for its members’ pots this year, compared with £477 million last year.
• Nest’s customer satisfaction ratings saw 71% of the Scheme’s members and 73% of employers rating the service as good or excellent.
• 98.3% of employers using Nest have fewer than 50 employees.
• More than 6,900 new employers joined Nest, on average, each month.
• As of 31 March 2023, Nest had £14.7 billion or 49.8% invested in its climate-aware equities strategies, up from £352 million or 12.6% invested in 2018. Nest’s climate-aware strategies help to manage climate-related risk by reducing investment in the biggest greenhouse gas and carbon emitters and investing more in green technology like solar and wind farms.