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Nest Guided Retirement Fund

Who’s it for?

The Nest Guided Retirement Fund is an option for members who are aged between 60 and 70, who have at least £10,000 invested in any of our funds and want to start taking their money out of Nest while still benefitting from potential investment returns. Nest members who are in the Nest Retirement Date Funds will be automatically moved into this fund at their intended retirement date if they meet the criteria and don't decide to do anything else with their money.

How does the fund work?

Nest manages and invests members' pots with the aim of providing them with sustainable withdrawals until age 85. We do this by splitting their pots into parts, each designed and invested differently to meet the different needs of our members throughout their retirement. Members can also continue to contribute to their pot, but they may be liable for additional tax charges if contributions exceed £10,000 per year.

A diagram showing the flow of money from and to the various parts of the Nest Guided Retirement Fund. The Nest Vault is at the top. The Nest Wallet for cash withdrawals, the Nest Safe for emergency cash and the Money for Later Life are underneath. Solid lines denote money going from the Nest Vault to the Nest Wallet and the Nest Safe. The money in these parts of the fund is available to withdraw. A dotted line denotes the money going from the Nest Vault to the Money for Later Life part of the fund. This money is set aside for income after the age of 85 years.

Nest Wallet

This contains money available to withdraw when a member needs it, which is topped up every year in July from the Nest Vault.

Nest Safe

This part is invested in very low risk assets and is designed to give members access to cash when emergencies and unexpected events arise. Ten per cent of members' initial pots will be allocated to the Safe for this purpose. If the investment performance of the Vault is particularly good in any year, bonuses will also be paid to the Safe.

Nest Vault

The Nest Vault is divided into two parts. One part is invested in assets that are more likely to grow and is designed to provide money for future years’ withdrawals until age 85. Money will be moved from the Nest Vault to the Nest Wallet annually until age 85, for this purpose. Money is allocated to the other part from age 65. This part is designed to provide a member with money to buy a guaranteed lifetime annuity from age 85 if they wish.

The amount allocated from the Nest Vault to other parts of the fund is based on, among other things, the investment performance of a member’s pot, how old they are, and when they join the fund. The Nest Investment Committee annually reviews the amount of cash available for members to withdraw from their Nest Wallet by using economic scenarios and long-term capital market assumptions prepared by JPMorgan Asset Management. We aim to give members an amount they can withdraw each year that is sustainable, while at the same time reducing the risk of them running out of money before age 85.

See whether the Nest Guided Retirement Fund is right for you in our dedicated retirement section. You can find out more detail on where this fund is invested and how it’s performing in our latest quarterly investment report.

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