29 June 2015Back to news home
NEST has launched its blueprint for a retirement income strategy suitable for its members, who represent the ‘DC dependent’ generation in the new pensions landscape.
It has developed the blueprint following a far-reaching consultation, the Future of retirement, which gathered evidence from around the world on the needs of DC savers following the introduction of new pension freedoms by the UK government.
That consultation showed that for most savers contributing to a pension is ultimately about having an income when they stop working, but that access to ad-hoc cash lump sums is important. The consultation also found that both in the UK and abroad providers like NEST have an important role to play in ensuring savers can access income as standard when they come to retire, without locking them in.
Based on these findings, NEST has developed a blueprint for meeting its members’ needs as the scheme matures and members build up bigger pots.
A retirement income blueprint for NEST’s members sets out three building blocks to cover three phases of later life: from mid 60s to mid 70s, mid 70s to mid 80s and mid 80s and beyond.
Commenting, Mark Fawcett, NEST chief investment officer, said:
'Since the pension freedoms were announced the challenge to industry has been to help savers achieve a sustainable retirement income without removing freedom and flexibility.'
'We believe this is possible but it requires innovation. Many of NEST’s members are the first generation of savers who’ll rely almost entirely on their DC pots and their state pension in retirement. This makes it absolutely critical that we get this right for them.'
'We’ve developed an evidence-based blueprint for how to meet members’ needs. We hope this will stimulate the innovation necessary for us and others to deliver what members will need and want.'
Further detail on the three building blocks for the blueprint: