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Building a NEST egg

Those who do not have access to a good occupational pension will, between October 2012 and 2017, be automatically enrolled into the National - Employment Savings Trust – NEST - with a 4% contribution deducted from their - salary.

In addition to this, employers will pay 3% and the government will make a 1% top-up to make a total contribution worth 8% of workers’ salaries.

This money will be put into a combination of five funds which will track the value of bonds, cash, shares or gilts.

Though not compulsory, those aged 22 or more that £7,475 a year will be automatically enrolled and those who don’t want to join will have to opt out.

At first, money will be invested in low-risk funds. After which it will be moved into more risky investments in the hope of growing the nest egg. Finally, the money will be transferred into lower risk investments, to protect what’s there.

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