Charges explained

Why does NEST charge?

We need to be able to cover the costs of managing your retirement pot. We need to pay the people and organisations that manage your money and keep the scheme working from day to day.

We also need to pay back the loan from the Government that enabled NEST to be set up. Like many other workplace pension schemes, NEST is run on a not–for-profit basis. The money we take in charges is used to run the scheme.

NEST charges

We work hard to keep our charges as low as we can. Being an online pension scheme helps us to do this.

You pay a small percentage charge of each new contribution that goes into your retirement pot. This contribution charge is set at 1.8 per cent, so from each £100, £98.20 goes into your pot.

There’s also an annual management charge (AMC) of 0.3 per cent of your total fund each year.

How it works in practice

Let’s look at an example:

If £100 is paid into your pot every month, the 1.8 per cent contribution charge would be £1.80 each month.

Over one year £1,200 is paid into your pot in total. This means that the contribution charge over that period would be £21.60 or twelve times £1.80.

The 0.3 per cent AMC is taken from the total value of your retirement pot over the year.

So if your total retirement pot is worth £10,000 throughout the year the annual management charge would be £30.

Charges can have a big impact on your retirement pot over time. At NEST, our targets for your money take account of how much more you’ll get after we’ve taken our low charge out.