Introduction

NEST's investment approach

Our approach is all about our members, keeping them saving and giving them the best retirement pot we can. It's based on in-depth research into our target market of new savers, consultation with our stakeholders and the expertise of NEST's in-house Investment Team.

Our approach focuses on helping members build up an income in retirement in a way that feels right for them, making the most of pensions as a reward and retention tool.

What can NEST's members expect?

One of the key questions your clients and their workers are going to ask is 'what will I get?' We think our investment approach provides members with a clearer answer to this question than other schemes.

We've used an investment model to compare potential outcomes of the NEST 2057 Retirement Fund to a lifestyled equity portfolio. We've calculated 10,000 possible outcomes for each portfolio to show how they perform in different investment environments.

This analysis tells us that NEST's portfolio should offer savers greater certainty. In more than 95 per cent of the 10,000 scenarios we achieve our investment objective of outperforming inflation. Over 80% of the possible outcomes provide investment growth of more than 2 per cent after inflation and charges.

This shows that not only do we have a clear idea of what we're aiming for, but based on our approach and demonstrated through our modelling we're confident we can achieve it most of the time.

Returns are far less predictable with a more traditional approach invested mainly in equities. Our research shows that this uncertainty is most likely to create savers who need much more reassurance from their employers, or savers who are less likely to save regularly.

Protecting savers from loss

Our research tells us clearly that our potential members worry more than anything else about losing their money. NEST's approach is specifically designed to minimise the chances of negative return in any circumstances.

Protecting our savers against loss, both in the short and long term, not only gives them a better return, it gives them confidence that they can save as well as a future they can rely on.