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Contributions and fees

With a subject as important as preparing for your future you want to know that you’re up to speed on all aspects of your workplace pension. Especially when it comes to payments.

We’ve collated all the information you need on the pension contributions you and your employer make and how much NEST charges as part of these.

What is the minimum contribution?

The minimum contribution set by the government that you and your employer collectively pay into your NEST account is 5 per cent of your salary (the exact amounts can vary from employer to employer). The minimum employee contribution is 3 per cent, which equates to approximately 2.4 per cent of your take-home pay.

From April 2019 the minimum contribution will rise to 8 per cent. The increase from 5 per cent to 8 per cent will mean you’ll get a bigger pension pot when you retire. So your minimum employee contribution will be 5 per cent, which equates to about 4 per cent of your take-home pay.

However, if you are self-employed or don’t reach the qualifying earnings threshold, these minimum contributions don’t apply. 

Learn more on how minimum contributions are worked out here

Is there a maximum contribution?

There are no restrictions on how much can go into your NEST pot. This means you’re free to contribute as much as you like.

There are only two very rare situations when you’d ever have to pay any additional tax:

The vast majority of members will never go over these limits, so it’s not something you need to be overly concerned about.

What do NEST charge?

There are two charges that NEST make when it comes to your pension.

We take a small percentage of the money going into your pot known as a contribution charge. This amount is 1.8 per cent.

Suppose £25 is being added to your pot each month, for example. Of this £25 we would take a contribution charge of 45p.

We also take a small percentage of the value of your retirement pot over the year. This is known as an annual management charge and is 0.3 per cent.

Suppose your total retirement pot is worth £5,000, for example. This means we would charge £15 over the year.

In these examples where £25 is paid every month and the total amount of money in your pot at the beginning of the year is £5,000, the overall total you’d pay in charges in that year would be £20.40. Read more about NEST’s charges here.

You can see how much has been contributed and the pension charges taken off at any time by logging into your online account. If you’ve not logged in before you can activate your account here.

Making transfers into NEST

As well as regular pension contributions from your salary you can also transfer money into and out of NEST. This means you can bring some pension pots together, making your pension savings easier to manage.

Remember that we don’t charge for transfers into NEST – we’ll only charge the 0.3 per cent standard annual management charge on your transfer once it becomes part of your overall pension pot.

Also we don’t charge for transfers out of NEST. However, it’s important to check any charges applied by your other provider.

Taking a break

You’re free to take a break from or stop paying contributions at any time if you want to. There are two ways you can do this if you feel you need to:

  1. By logging into your online account and updating the way your money is managed. NEST will then let your employer know on your behalf so they can stop taking money from your pay.
  2. By asking your employer directly to stop taking contributions.

Just remember that by taking a break from contributing yourself means that you also miss out on contributions your employer would make.

Using my online account

You can see how much you’ve got in your retirement pot, make extra contributions and change the way your money’s being looked after at any time by logging into your online account. It’s always good to do this from time to time so you can take stock of your pension savings.

Calculate your likely NEST pension pot

Based on how much you and your employer might contribute, you can use NEST’s pension calculator to work out what you might get when you take your money out of NEST.

Contribute on behalf of a NEST member

Anyone can contribute to someone else’s NEST retirement pot. They’ll just need to pay by debit card and tell us the NEST ID of the member.

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