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TUC: Government decision on NEST and pension products will leave pensioners at risk from scams

The TUC has expressed concern at the government’s announcement yesterday (Thursday) that the state-backed National Employment Savings Trust (NEST) will not be allowed to offer retirement income products.

More savers are coming to retirement with defined contribution pension pots. But following the ‘pension freedom’ changes of 2015, most face the choice between cashing in their savings or expensive ‘drawdown’ products from insurance companies that risk them running out of money.

The TUC says savers need easier access to products that provide them with a secure income in old age. To meet this need, NEST had started developing a blueprint for retirement income services. However, the government announced yesterday that it would not allow NEST to offer such products.

TUC General Secretary Frances O’Grady said:

“It is deeply disappointing that ministers have caved in to vested interests.

“Pension savers have been ill-served by the traditional pensions industry for decades, being shoe-horned into inappropriate products, often with high fees that have left them worse off.

“Those reaching retirement in the coming years desperately need easy access to suitable, good-value products to see them through their old age.

“The announcement that ministers won’t allow NEST to help savers who need it means the risk that government just stands by while more workers reaching retirement fall victim to rip-off products and outright scams.”

Notes to Editors:

  • All TUC press releases can be found at tuc.org.uk/media
  • TUC Press Office on Twitter: @tucnews

Contacts:

Press Office  T: 020 7467 1248  E: media@tuc.org.uk
Alex Rossiter  T: 020 7467 1285  M: 07887 572130  E: arossiter@tuc.org.uk
Tim Nichols  T: 020 7467 1388  M: 07808 761844  E: tnichols@tuc.org.uk
Elly Gibson (Mon to Thurs) T: 020 7467 1337  M: 07900 910624  E: egibson@tuc.org.uk
Michael Pidgeon  T: 020 7467 1372  M: 07717 531150  E: mpidgeon@tuc.org.uk

 

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