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Nest celebrates growth of pension scheme

Published: 11 July 2019

Nest is today highlighting its growth over the past five years, summarised in its 2018/19 annual reports and accounts for both Nest Corporation and the Nest pension scheme.

The reports details how earlier this year Nest had 7.9 million members and £5.7 billion assets under management (AUM). 

This is compared to the start of 2013/14, when the scheme had 80,000 members and £3.8 million AUM.

With staging for auto enrolment completed Nest has turned its focus to engaging with its members around their pension savings. 

Commenting on the reports Helen Dean, Nest’s Chief Executive Officer, said:

“Looking back through past reports makes me realise just how far Nest has grown and developed in a short space of time. What’s more, we’ve managed this growth while delivering a high-quality service to our members.

“As our members become used to saving into a pension, we have deepened our understanding of their needs and how we can work with them to support their retirement plans. This has led to trialling new approaches to engagement, such as personalised video messages to members.

“Our focus is to build upon the success of auto enrolment and ensure we’re helping people achieve the best outcome in retirement.”

The reports are published while Nest is tendering for a new scheme administration service to replace the current contract, which comes to an end in 2023.

Otto Thoresen, Nest Corporation Chair, commented:

“We are making good progress with the future procurement of scheme administration services. The aim is to make the scheme ready for a digital world, improving our service and also harnessing advances in technology to further increase efficiency.

“We expect the new service to deliver improved outcomes for our customers whilst maintaining our low-cost ethos and ensuring a service that is robust and secure.

“Just as I have been able to reflect positively on Nest’s achievements this year, I am confident that our current skills, corporate structure and future plans will enable us to continue to deliver for our members in the years ahead.”

Information contained within the reports include (as of 31 March 2019):

  • Nest was managing £5.7 billion on behalf of approximately 7.9 million members. This is compared to £2.7 billion and 6.4 million members for the same time last year.
  • The Nest 2040 Retirement Date Fund has achieved an investment return of 9.2 per cent (net of Nest’s annual management charge) annualised over the last five years. As confirmed by Nest’s latest Quarterly Investment Report, there was a cumulative return of 55.5 per cent net of Nest’s annual management charge over the same period.
  • 57 per cent of our members are under 40 years old.
  • The overall opt out rate for Nest members is 7.4 per cent, with younger people having the lowest rate of opting out.
  • Shareaction’s independent survey of 10 UK auto enrolment providers, looking at responsible investing and member engagement, ranked Nest first.
  • More than half of the money invested through Nest during the year 2018/19 is made up of employer contributions and tax relief.