Glossary · UK

What is NEST Pension?

NEST is the government-backed workplace pension scheme set up to deliver auto-enrolment, accepting any UK employer that wants to use it.

Full Definition

NEST (National Employment Savings Trust) is a low-cost, government-backed defined-contribution pension scheme created to support auto-enrolment. Any UK employer can use it to meet their duty to enrol eligible workers, and it has a public-service obligation to accept all employers, including small businesses other providers might decline. Contributions from you, your employer and tax relief are invested, usually in a NEST Retirement Date Fund that adjusts risk as you approach retirement. NEST charges an annual management charge plus a contribution charge on new money paid in. Like other pensions, contributions benefit from tax relief and savings grow free of UK Income Tax and Capital Gains Tax within the wrapper. The Pension Annual Allowance for 2026/27 is GBP 60,000. NEST matters because it gives millions of employees, especially lower earners and those at small firms, a simple default route to retirement saving without needing to choose a provider themselves.