Chancellor George Osborne has announced in the spending review that the government will fund the launch of a national pension fund to force workers to save for retirement.
The National Employment Savings Trust (NEST) will be aimed at those workers who are not saving for retirement. It is part of a plan to make pension-saving compulsory.
The spending review read, “The Department for Work and Pensions (DWP) settlement includes funding for the introduction of auto enrolment from 2012 and the establishment of NEST.”
Originally devised by the Pensions Commission, chaired by Adair Turner, NEST has come about following research which highlighted in 2004 that 12 million workers under 25 were not saving enough for their retirement.
As of 2012, workers whose employers do not offer a pension fund will join NEST. Meanwhile, companies that already sponsor a pension fund will be forced to include all new recruits.
Workers over 22 earning more than £5,000 are eligible but will be able to opt out of NEST or their corporate pension. Adair Turner predicted that the fund could reach £150 billion in assets by 2050.
A DWP spokeswoman said that further details regarding NEST will be published later this month.
