Nest fees 'unfair on early savers'

By Tom Farley, Fri 19 Mar 2010 - Published in Pensions

The proposed fees for the National Employment Savings Trust (Nest) have been criticised by a pensions expert.

Earlier this week, the government announced that the pension fund will charge an additional fee of two per cent on contributions until the set-up costs of the pot are paid off.

Commenting on the proposal, Ros Altmann, an advisor to the pension industry, said the charge seems like a "lot of money" to take from savers before they have even seen the benefit of the fund.

"Of course, conventionally there are charges on any savings product but the government is organising a scheme that is supposed to encourage people to want to save," she added.

Ms Altmann suggested that taking two per cent off of the first savers to use the fund is not a good way to encourage people to use it and could cause people to wait until the fee is abolished.

Once the set-up costs of the Nest have been extinguished, it is proposed that the pot will have fees as low as 0.3 per cent attached to contributions.

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