Updated: January 13, 2020

Nest Pensions Reviews

Looking for a review of your Nest pension to find out how to get the most out of it? Read this guide to find out how to claim a free pension review

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: January 13, 2020

Since its launch in October 2012, with the aim of making auto-enrolment easier for employers, the Nest (National Employment Savings Trust) workplace pension scheme has quickly accumulated almost nine million members – one-quarter of the total UK workforce.

Whilst this clearly indicates the UK government’s objective of encouraging more people to save for retirement is being met, it’s now key for anyone contributing to such schemes to review their Nest pension fund on a regular and consistent basis.

This article looks at why reviews of your Nest workplace pension are such an important discipline and what this exercise entails.

Once you’ve read through the details below, if you’d like to arrange a review of your Nest pension scheme give us a call on 0808 189 0463 or make an enquiry and we will arrange for an advisor we work with to get in touch.

Why is it important to review my Nest pension scheme regularly?

At the absolute minimum, regular reviews of your Nest pension scheme provide time to reflect upon what your retirement aspirations are and how much income you feel you may need to comfortably achieve these goals.

For many of us, particularly the younger generation, retirement can seem a long way away which often results in plans for that period of our lives falling down our list of priorities in favour of present day considerations.

Nest pensions, as with all other retirement savings vehicles, require constant monitoring so you can assess how well your fund is performing and to review whether any changes are required.

The more time and preparation you allow for this, the better chance you have of making any and all necessary adjustments in order to achieve the target income you need.

Nest pension reviews should focus on the following areas:

  • Overall fund performance
  • Assessment of the risk strategy
  • Pension contributions
  • Charging structure

Overall fund performance

A Nest pension provides a default investment fund called the Retirement Date Fund, which provides a strategy aligned with the target date of your retirement.

There are also a further six funds available:

  • Ethical Fund
  • Higher Risk Fund
  • Lower Growth Fund
  • Pre-retirement Fund
  • Sharia Fund

Whichever fund you have chosen, a review offers the opportunity to place a spotlight on its performance and compare this against its peers. You can then decide whether the investment return is providing the overall impact expected and, if not, consider making changes.

Assessment of the risk strategy

A Nest pension is a long-term savings plan, therefore, it is perfectly feasible that your attitude to risk with regards your investment choices may alter over time, hence a regular review provides the perfect platform to assess this before making any necessary changes.

For example, the early period of your pension plan can provide the most suitable time to adopt a riskier approach with your contributions. However, this may change the closer you get to retirement as you may prefer to be more cautious in order to protect your overall fund value.

Pension contributions

The regular contributions you make towards your Nest Pension should also be reviewed on a consistent basis. Fund performance alone may not be sufficient to produce the retirement income you need, therefore, an increase in the amount you pay may be required.

Whilst we’d all prefer to save the maximum allowed each month, in reality this isn’t always possible. A review of your Nest pension payments allows for consideration as to whether an increase is feasible as you earn more income during your working life.

Charging structure

The good news with Nest pensions is the applicable charges are typically amongst the lowest and most transparent of all retirement plans available in the UK. Only two charges apply, an annual management charge (usually no higher than 0.3%) and a regular contribution fee (usually no higher than 1.8%).

A regular review can highlight whether the charging structure is having any undue negative impact upon the overall performance of your pension fund.

As you can see, there’s lots of valid reasons why its very important to conduct regular reviews of your Nest pension so don’t delay, give us a call on 0808 189 0463 or get in touch and we can help you get started.

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How often should reviews of my Nest pension be conducted?

There are no formal rules on how often you should review your Nest pension scheme. An annual review is often cited as being most commonly recommended, however, there is absolutely no harm in conducting ad-hoc reviews as and when you see fit.

The regularity of your Nest pension reviews become more relevant the closer you get to your chosen retirement date. However, as previously stated, it is most important to instill a regular habit of reviewing your retirement provision throughout your working life rather than in the final few years.

Who do I speak to about a review of my Nest pension scheme?

You can actually review your Nest pension on a regular basis yourself through the online account each member is given. All you need to log in is your national insurance number and a bespoke ID code which is given to you by your provider.

However, due to the complexity that is often involved with a formal pension review, it is highly recommended that you seek the assistance of a professional advisor. This is where we can help.

The advisors we work with are fully conversant with all aspects of Nest pensions and will be able to review your own retirement plan with you, making any recommendations necessary. Make an enquiry and we will arrange for an expert to contact you.

What are some of the most likely outcomes of a Nest pension review?

Any conclusions drawn from a review of your Nest pension must keep in mind the overall aim, which is to generate a retirement income which can provide you with the standard of living you require.

If, following a review, you believe your pension contributions could be better served within a different investment fund, providing an alternative strategy – either as a result of poor performance or due to a change in risk assessment – then those alterations can and should be made.

Switching investment funds is typically the most common outcome of a pension review, the good news is all fund switches within a Nest pension can be made free of charge.

The amount of your pension contributions should also not be overlooked, therefore, a focus upon your disposable income to ascertain whether any increase in payments is viable should be considered.

Speak to an expert to arrange a review today

The plans you have for when you retire will naturally change and evolve over time. Regular reviews are the best way of ensuring your Nest pension remains on track to deliver the income you need once you reach retirement.

If you’d like to arrange a review of your Nest pension scheme, we can arrange for one of the advisors we work with to get in touch. All advice is free and any information is always given in the strictest confidence. Call us on 0808 189 0463 or make an enquiry to get started.

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Richard Angliss

Richard Angliss

Finance Expert

About the author

Richard Angliss has made a career in financial services which stretches over 40 years.

His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

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