Nest Pension Reviews, Transfers, Drawdown and More

Nest (National Employment Savings Trust) is a government-backed pension scheme originally set up to ensure that every UK employer could offer a workplace pension. Today, it is one of the largest pension providers in the country, boasting millions of members.

Because Nest is designed for the mass market, it is often a ‘set and forget' pension for many workers. However, its unique fee structure and simplified investment options mean that a periodic review is essential to ensure your retirement savings are working as hard as possible.

Who is Nest?

Established by the government but operating as a self-sufficient trust, Nest is a non-departmental public body. It was built specifically to handle auto-enrolment, meaning it must accept any employer who wants to join. This makes it a staple for small businesses, charities, and the self-employed.

Nest Pension Products & Investments

Nest keeps its product range simple to avoid overwhelming savers. Most members are placed in their Retirement Date Funds, but there are other specialized options available:

• Retirement Date Funds (Default): This approach manages risk based on when you plan to retire. When you are young, the fund seeks growth; as you approach retirement, it automatically shifts into lower-risk assets like bonds and cash

• Ethical Fund: For those who want their money invested in companies with positive environmental and social records

• Sharia Fund: An investment option that complies with Islamic law, avoiding sectors like tobacco, alcohol, and interest-bearing interest

• Higher Risk Fund: For members who are willing to accept more volatility in exchange for potentially higher long-term growth

The Unique Fee Structure

Nest’s charging model is different from most other UK providers. They use a two-part system:

1. Contribution Charge (1.8%): Nest takes £1.80 for every £100 paid into the pot. This applies to your contributions, your employer’s, and the government’s tax relief

2. Annual Management Charge (0.3%): This is a yearly fee based on the total value of your pot

Note: If you stop contributing to a Nest pension (for example, if you change jobs), the 1.8% charge stops, but the 0.3% AMC continues to be deducted from your existing balance.

Reviewing Your Existing Nest Pension

Many people have a 'frozen' Nest pot from a previous employer. Reviewing these accounts is critical because:

• Investment Performance: Nest’s default funds are designed to be low risk, but they may underperform compared to more aggressive growth funds available elsewhere

• Consolidation: Is it better to keep your money in Nest, or move it to a SIPP or a new workplace pension provider? A pension review can calculate the long-term impact of Nest’s 1.8% entry fee vs. the higher AMCs of other providers

• Target Retirement Age: If your Retirement Date in the Nest system is wrong, your money might be moved into low-risk, low-growth assets too early, potentially costing you thousands in lost returns

Transferring To and From Nest

Transferring In

You can consolidate other pension pots by transferring them into Nest. One major advantage is that Nest does not charge the 1.8% contribution fee on transfers in. This makes it a potentially low-cost home for older, high-fee pension pots

Transferring Out

If you want more investment choice or a platform with better digital tools, you can transfer out of Nest to another provider. Nest uses the Origo electronic transfer system, which typically makes the process relatively quick (4–6 weeks). However, you should always check if you are moving to a provider with higher annual fees that could outweigh the benefits.

How Our IFA Service Can Help

At Money Help Desk, we specialise in helping individuals assess whether their Nest pension is still fit for purpose. While Nest is a great starter pension, it may not be the most efficient vehicle as your pot grows.

Our Independent Financial Advisers (IFAs) provide:

1. Forensic Fee Analysis: We compare Nest's 0.3% AMC against other market leaders to see where you’ll pay less over 20+ years

2. Risk Profiling: We ensure your Nest fund (Default vs. Higher Risk) actually matches your personal comfort level with market fluctuations

3. Whole-of-Market Search: If Nest isn't the right fit, we search the entire market to find a provider that offers the specific features you need, such as flexible drawdown or a wider range of ESG funds

4. Transfer Oversight: We manage the transfer process from start to finish, ensuring your funds are reinvested correctly without unnecessary time out of the market

Get started here to speak with an IFA to see how your Nest pension compares to the rest of the market.