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Coronavirus impact: Support for employers and your workers

We are here to support you

Many people in the UK face uncertainty as the Coronavirus situation develops. We want to reassure you that we’ve taken all necessary steps to ensure that the services we - and our partners - deliver remain available and operate without interruption.

All the ways you can contact us remain open and fully operational. Our systems have not been altered and will continue to work in the same way.

What impact does coronavirus have on my ongoing contributions?

Employers’ duties remain unchanged, so please where possible continue to follow your normal processes and pay contributions when they are due.

The government has confirmed that as part of the Coronavirus Job Retention Scheme, grants available to support business and their employees.

For more information from the government on these grants, please see Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme.

If I use the government grants to pay furloughed workers, do I still need to deduct pension contributions?

The Pensions Regulator has advised that the employers duty to pay pension contributions has not changed. Contributions will be based on what you pay workers and employers must meet the statutory minimum pension contributions. The government’s arrangements for paying employers in respect of furloughed workers will include the employer’s pension contributions.

Here are a few points to consider when calculating the pension contribution due for a furloughed worker with a salary sacrifice arrangement:

  • Consider any additional contractual obligations you have agreed to with your employees,
  • Your obligations in the pension scheme rules continue to apply as normal.

For more information please see DC pension contributions: Covid-19 technical guidance for large employers.

I haven’t got enough money to pay contributions, what should I do?

We know this is a challenging time for many employers and we recognise the strain this is creating. 

You should still load the contribution amounts to the Nest system. Once you have done that click ‘Save changes’ so the details are there when you are ready to pay which you should do as soon as you are able to. Only click the ‘Submit schedule’ button on screen when you are ready to pay the schedule. If you are unable to pay at present, this will enable you to pay the schedules in future as and when you are able using your normal process to bring payments up to date.

The government has previously announced a range of measures aimed at helping businesses continue to keep employees on their workforce and payroll in these difficult times.

You can refer to the following guidance from the government and TPR.

Claim for your employee’s wages through the Coronavirus Job Retention Scheme

Covid-19: an update for trustees, employers and administrators

What should I do if my business becomes insolvent:

You’ll need to let us know, either through from your Nest account or by calling us, that your organisation has become insolvent. Please note that although we won’t be expecting contributions relating to periods after this date, any contributions in respect of members’ earnings periods prior to this would remain due if unpaid.

You may find the below links useful:

What happens if my organisation becomes insolvent?

How do I notify NEST of insolvency?

What should I do if my business is closing?

If your business is closing you may close your Nest account. There a few things to consider before you close your Nest account. Please see How do I stop using NEST? for more information.

Will I be reported to The Pensions Regulator if I don’t pay pension contributions?

Yes, we’re still required to report employers for failed payments. However, the Regulator also understands these are exceptionally challenging times and for this exceptional period require us to report employers for late payment when they are over 150 days late in paying, rather than the previous 90 days. This gives you longer to bring your payments up to date before being formally reported to the Regulator.

The Regulator has published the following statement: “We know this is a challenging time for everyone and we recognise the strain this is putting on employers. We will take a proportionate and risk-based approach towards the enforcement of decisions, in light of these challenging times, with the aim of helping to get employers back on track and supporting both employers and savers.”

Can workers suspend their payments for a few months if they want to?

If workers ask to suspend or cease contributions they should be processed as you would normally do for a leaver/member ceasing contributions. When they rejoin, either voluntarily or at the 3-year re-enrolment date they should be added in as you would for any other new member. Then, if they’re eligible to opt out, they’ll have that option.

This may seem like a lot of work for a worker who only wants to suspend contributions for a few months, but it is the only way to do this within the regulations. 

Can I pause employer pension contributions? 

No. If you are paying workers, you must make employer pension contributions and deduct employee pension contributions based upon the amount of pay they receive. 

Due to business changes some workers are no longer earning enough to qualify for a pension contribution. What should I do?

If a worker’s earnings fall below the lower level of qualifying earnings (£6240 for the 2020/2021 tax year) and your definition of pensionable earnings is qualifying earnings, then when updating contributions on Nest the member should be marked as having ‘insufficient earnings’.

I have stopped paying some workers, what do I need to do?

For those workers you have stopped paying for, you should mark them as you would normally do for a leaver/member ceasing contributions on a contribution schedule.

When you start to pay them in the future and assuming they are eligible to rejoin, you should enrol them into the Nest account as you would do for any other new member.

You may find the following links useful: 

How do I let Nest know if a worker wants to stop making contributions?

How do I use a CSV file to let you know a member has left employment?

How do I let you know a member has left employment using my online account?

I am suspending my business activities. What do I need to do with my workers’ pensions?

If you are no longer paying workers, you should mark all of your Nest members as you would normally do for a leaver/member ceasing contributions. You should then check all of your unpaid contribution schedules showing on the Nest system to make sure that they are up to date. Any outstanding schedules will trigger late payment processes.

Some workers have asked to stop pension contributions, can I tell all my workers about this option?

You should not advise or encourage workers to opt out of your workplace pension scheme. This could be considered an inducement and would be a breach of your legal duties. We’re obliged to monitor this and report any such incidents to the Pensions Regulator.

Is the government going to reduce or suspend employer and employee pension contributions for automatic enrolment?

No. The government anticipates that employer and worker contributions will continue to help workers save for retirement.

Should I cancel my Direct Debit?

No. Please keep your Direct Debit active – there’s no need to cancel it. As per normal processes, we will only collect payments from your Direct Debit as you instruct us to do so, by following the normal contribution schedule process.

A worker has passed away, what do I need to do?

Please see What do I need to do if a member of my organisation has died?

What additional action should I consider?

You may want to review the number of delegates on your Nest account to ensure you have enough cover in case of illness. Please see How do I add an individual delegate once I’ve set up with Nest?

Consider checking that your primary contact details are up to date in case access is required in an emergency. For more information please see How do I change the primary contact?

Getting in touch with us

If you require assistance, please contact us through our normal channels, including by accessing our help centre.

We’ve provided links below to some of the most common areas accessed by employers:

How do I let you know a member has left employment using my online account?

Where do I go to make contributions?

Overdue contribution schedules

How do I let Nest know if a worker wants to stop making contributions?

How do I use a CSV file to let you know a member has left employment?

How do I tell Nest that a member isn’t due to make full contributions for this pay period by entering information on the website?

These are unprecedented times and our teams are here to support you. We’ll work to ensure this page remains up to date and contains the latest information.

Pension Scams and online security

Scammers are preying on fears related to coronavirus. Protect yourself and your business from phishing scams. Remember that emails from Nest come from an email address ending in @nestpensions.org.uk or occasionally from @videosmart.com, a trusted partner. Any other address is likely to be fraudulent. Find out more about Pension scams and online security.

Below are some answers to questions you and your workers may have about Nest Investments:

Video: Update from Nest’s CIO, Mark Fawcett

How have our investments performed recently?

Our main funds fell at the start of the pandemic but by considerably less than the main UK and international stock markets because we’ve carefully designed our long term strategy to help smooth out some of the sharper ups and downs in markets.

Were we prepared for this and if so how?

While the coronavirus pandemic is entirely unprecedented, we’ve built our investment approach on the understanding that markets go through periods of difficulty and uncertainty. We’ve prepared for difficult markets by diversifying our default funds so they are not overly reliant on any one asset class. We’re in a good position to be able to buy shares when markets are down and therefore help our members benefit when markets recover.

Do we intend to change our investment approach and if so how?

We’re keeping a close eye on developments. Our approach is long term and strategic, so any changes we make will be through that lens. We’ve prepared for situations like this by diversifying our default funds, so they are not overly reliant on any one asset class. We’re in a good position to be able to buy shares when markets are down and therefore help our members benefit when markets recover.

What should I tell my workers? Should they be changing investment funds?

We can’t give financial advice but in these types of scenarios, the most sensible thing to do can often be to keep focused on the long-term goal and wait it out. Your workers might want to discuss their options with a financial adviser or The Pensions Advisory Service. They can find more information on our Guidance and advice webpage.

If you have questions from your workers about the impact of coronavirus on their investments, please guide them to How will my investments with Nest be affected by coronavirus?

 

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