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Government unveils
low cost pension

The Government's new low-cost pension scheme will be known as Nest.

The Personal Accounts Delivery Authority (PADA) said personal accounts would be branded the National Employment Savings Trust, or Nest for short.

The scheme, which is aimed at people on low or moderate earnings who do not currently have access to a pension, will be available in low volumes from 2011.

Its introduction is part of Government pension reforms being phased in from 2012, under which all workers earning above a certain level will automatically be enrolled into a company pension scheme or Nest, although they will retain the right to opt out.

Individuals will have to pay in at least 4% of their salary to the scheme, with employers contributing 3% and the Government adding 1%.

However, contribution levels will be phased in gradually to enable workers and companies to adjust to the costs.

Tim Jones, chief executive of the PADA, said: "We need a brand which will resonate with the scheme's potential members; with Nest we believe we will achieve that.

"We have followed a detailed, research-based process to ensure this will be a brand designed by members, for members. Nest is clearly favoured by both potential members and employers."

Minister for pension reform Angela Eagle said: "This Government's radical reforms to the pensions system will ensure millions of workers on low and moderate incomes are able to save for their retirement in a workplace pension with a new guaranteed minimum contribution from their employer.

"Nest will play a key role in this and help transform attitudes to saving."

Copyright © Press Association 2010
All articles are copyright The Press Association 2010. News articles provided by The Press Association for Family Investments. Whilst every care it taken to ensure accuracy of editorial content, Family Investments takes no responsibility for any errors or omissions. The views expressed in these articles are not necessarily those of Family Investments.

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Important Information: The contents of this website must not be interpreted as financial advice. You should not rely on the comments and views expressed within this site. Your own individual circumstances should always be considered. If you have any doubts regarding financial matters you should seek advice from a suitably qualified professional. See our Terms and Conditions for more information. Site last reviewed and updated 29/07/10.