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The National Employment Savings Trust (NEST) was devised by the pensions commission when they highlighted that 12 million workers under the age of 25 were not saving sufficiently for their retirement.

NEST is one of the pension schemes employers will be able to choose to meet their new legal duties and it is planned that NEST will launch in spring 2011. From Oct 2012 any worker over the age of 22 and earning more than £7475 per year will be automatically enrolled into the scheme, although employers have a 3 month grace period to enrol new employees. There will also be an option for employees to opt out of the scheme if they so wish.

Pension contributions will be based on earnings over the LEL (currently £5,715) and the minimum contribution will be set at 2% (1% employers, 0.8% employee and 0.2% tax relief), from 2012 until Oct 2016. If employers already administer a company pension scheme , as long as this meets certain criteria there will be no need to introduce the Nest scheme as an option.

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