NOW OPEN: the MSE Forum 'Ask An Expert' event. This time we'd like your questions on TRAVEL & HOLIDAY DEALS. Post by Wed and deals expert MSE Oli will answer as many as he can.

MSE News: Government to ease restrictions on low-cost pensions

"Workers will find it easier to build up retirement pots, as the Government plans to ease rules on its pensions scheme..."
Read the full story:

Government to ease restrictions on low-cost pensions


Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.


  • PincherPincher
    6.6K Posts
    I would like to see some TV show select some real people across the demographics and track their progress.

    The incentive for people willing to be tracked is, when they come to retirement, and the money had disappeared, at least the news and documentary programs highlighting their plight will attract some donation from viewers.

    The most likely scenario is the employer goes bust, the company pension fund is sold off to some specialist administrator, where the money is barely invested, but is sucked dry by years of admin charges, until there is nothing left when members actually retire.
  • Andy_LAndy_L Forumite
    12.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Pincher wrote: »
    The most likely scenario is the employer goes bust, the company pension fund is sold off to some specialist administrator, where the money is barely invested, but is sucked dry by years of admin charges, until there is nothing left when members actually retire.

    NEST is a DC scheme so there is no company pension fund, every one has their own individual fund. thus the health of the employer is an irrelevance
  • GhIFAGhIFA Forumite
    619 Posts
    Pincher wrote: »
    The most likely scenario

    Except it's not the "most likely" scenario, is it? It's an excessively pessimistic scenario that is not the experience of most people who take their pension planning seriously.
    I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.
  • jamesdjamesd Forumite
    25.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    And sadly the story misses one point that people can really benefit from: the removal of the ban on transferring out of NEST and into a pension scheme with a better range of investments and possibly lower costs.

    Pincher, there is no company pension fund at all with the NEST or any other personal pension scheme. It's all allocated to individuals and completely unrelated to the health of their employer after the employer has paid in their monthly payment. No shortfalls, no effect on the pot values if the employer goes bust and the members could just transfer the pot to any other pension provider they choose if they wanted to.
  • edited 16 July 2013 at 5:27PM
    SnowManSnowMan Forumite
    3.3K Posts
    Part of the Furniture 1,000 Posts Photogenic
    edited 16 July 2013 at 5:27PM
    According to the 2012/2013 accounts NEST allowed a £1.4 million fraud to take place through a serious failure in their internal controls. Oh dear.
    It also notes an incidence of fraud against the Corporation involving the diversion of payments to a supplier, and what the Corporation has done to strengthen its defences. The fraud resulted in a loss of £1.4m from NEST Corporation. No money was taken from the NEST Scheme or members’ pots.
    I came, I saw, I melted
  • JoeCrystalJoeCrystal Forumite
    2.9K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Well, that is alright as the Chair said:

    One adverse event of significance during the year was the discovery of a criminal fraud against NEST Corporation. We responded immediately and have strengthened our defenses, although we are chastened by the experience. Steps to recover the losses are still ongoing; our approach is to vigorously pursue recoveries as long as the prospective returns exceed the costs involved. This fraud did not affect member’s savings pots directly, but was in connection with a supplier of services to NEST Corporation; however any unrecovered losses increase the running costs of the scheme.

    Well, that is alright! *phew*

  • PincherPincher
    6.6K Posts
    It's a honey pot. Like any honey pot, somebody smells it and starts pilfering from it.

    Give loans (or buy debt) to dodgy friend's company that nominally returns 6%, declare 4.5% bonus to pension policy holders. Several years later, the dodgy companies collapse, all the criminals resign from the management team just before the news hit the fan, give themselves fat severance pay packages and disappear. Administrators move in, discover £billion black hole in unrecoverable debt. Freeze bonuses, impose Market Valuation Adjustments if you try to move money out, effectively lying about what the "individual" pension pots are worth.

    Eventually, government bail out.

    NHS managers are soulless, talentless jobs-worth rodents who jump on a gravy train when they see it. Cockroaches like that will be crawling all over the NEST,
    just like !!!!!philes are applying for seminary schools.

    I just want to have somebody do a Seven Up style documentary on the decline and fall of the NEST scheme over however long it lasts. In 20 years time, you can tell me I was wrong.
  • why don't we save time, and tell you you're wrong now? :)

    thanks to robert maxwell, there are now better controls to try to prevent a private company from raiding its employees' pension scheme. but this has little relevance to NEST, anyway, since it's just a non-profit-making body which administers a large pension scheme.

    NEST isn't going to "invest" money with their mates. it's all going into stuff they have no personal connection with. stock markets, etc.

    while this fraud is very disappointing, it relates to paying their suppliers, not investing funds. and the amounts they pay their suppliers are always going to be very small relative to the amounts they are administering.

    MVAs, and your references to declaring bonuses, suggest you're talking about "with profits" funds. which NEST aren't running at all. (and a good thing they aren't.)

    there are some valid criticisms of NEST. but the money is not all going to disappear, and it won't need bailing out.
  • PincherPincher
    6.6K Posts
    Lovely, so all the management team has to do is to be George Osborne's wine buddies to be appointed, invest the money in 30 year gilts, which will help George Osborne with lots of cheap money at 1%.

    20 years later, they all get New Year Honours, and a nice retirement package. 30 years later, the policy holders are told, your money has been safely invested and growing at 1%, congratulations on your wise decisions not to rebel when you were forced to save, and insist on putting your money into an ISA instead.
  • you're just making this up.

    they're not investing it all in gilts.
This discussion has been closed.
Latest MSE News and Guides

Energy Price Cap change

Martin Lewis on what it means for you

MSE News

Best £1 you've ever spent?

Share your most impressive bargains

MSE Forum