NEST Pension UK: Fine for Some, a Tax for Others

NEST is the auto-enrolment provider of last resort, holding pensions for 13 million UK workers. For low earners with small pots it is fine - cheap enough, well-governed, hard to mess up.

The 1.8% contribution charge is a tax on new money going in. The 0.3% annual charge is fine. Together they cost a middle earner roughly £20,000-£30,000 over a working life compared to a 0.15% SIPP.

If your pot is over about £10,000 and you have left the employer who pays into NEST, transferring to a SIPP is worth considering on the maths. If you are still being paid into NEST, many readers keep the contributions flowing and move the bulk later.

Stay in NEST if the pot is small, earnings are low, you would raid the money if access was easier, or your only employer contribution route is NEST.