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NEST (National Employment Savings Trust)

Due to launch in 2012, NEST will provide qualifying employees with a low-cost pension partly funded by Employer contributions. Employees will be automatically enrolled but will be able to opt-out if they wish. Employees who find themselves automatically enrolled in outdated workplace pension schemes could see thousands of pounds wiped off the value of their funds by fees.

Millions of staff will join employer pension schemes for the first time under the government's plans for auto-enrolment, which will begin in October for the largest companies.

The government-backed National Employment Savings Trust (NEST) has been set up for companies without a pension scheme. Its annual management charge is a competitive 0.3%. Two private auto-enrolment firms, Now: Pensions and the People's Pension, charge 0.3% and 0.5% respectively.

Investment Choices will be available within NEST, although a default option will apply to those not wishing to decide. Most employers will be obliged to offer NEST unless they already offer a satisfactory scheme to their employees.

However, the Pensions Institute has warned that many workers will be signed up to existing company schemes with considerably higher annual fees.

Auto-enrolment is designed to plug the savings gap because people are simply not saving enough for their retirements - some not at all. It will offer a workplace pension to every employee, with the launch dates staggered according to company size.

It is possible for individuals to opt out of auto-enrolment, though they will need to do so every three years. They must then ensure they are saving in the most efficient way within a vehicle with the best prospects available.

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