Big changes are coming to workplace pensions — and they could work in your favour. Here are the top three things to know about the proposed reforms in the current Pension Schemes Bill.
1. Bigger pension schemes = economies of scale
The Government suggests that by 2035 pension providers should reach a minimum size of £25 billion or more in assets, leading to fewer, larger schemes. Bigger schemes can achieve real economies of scale, have greater bargaining power and offer access to better investments deals, which could deliver better outcomes for your employees. Providers falling below the £25 billion threshold may need to join with others or, in some cases, leave the market altogether. There are reports that some providers are already exploring potential sales – a sign of the shifting landscape.
Nest already manages over £50 billion for 13 million members and is trusted by over 500,000 employers and thousands of businesses like yours.
2. Helping your team get more from their pension
From 2028 a new “value for money” framework should make it easier for you to compare pension providers and choose the one that gives your employees the best outcomes. Nest’s scale means your team gets access to investment opportunities usually reserved for large investors at no additional cost to you.
3. Your pension contributions could help power the UK economy
The proposed reforms encourage pension funds to invest more in UK infrastructure, housing, and growing businesses — helping to build a stronger economy. Nest is already putting your team’s money to hard work around the country and in local communities. For example, we invested £200 million in Hornsea One, the offshore wind farm off the Yorkshire coast that powers over 1 million homes.
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