Revealed: The top fears about auto-enrolment and NEST

Pension professionals, advisers, businesses and consumer groups have responded to a Work and Pensions Committee (WPC) inquiry into auto-enrolment and the National Employment Savings Trust.

Summarised here are the top five concerns highlighted by respondents to the inquiry.

Staging dates and competition

"Those employers who have early staging dates are disadvantaged compared to those with later ones, having to fund both direct and indirect costs. For any business that we bid for between November 2013 and 2016 we will be more expensive than our smaller competitors."

Compass Group PLC, food service provider employing 90,000 UK people

Transfers in

"The cap on annual contributions and the blanket restriction on transfers in to NEST create disincentives for some employers to use NEST."

Consumer Focus, statutory consumer champion (England and Wales)

NEST's market share

"If opt-out rates are so high NEST is threatened with not being viable, and moves into areas already catered for by other providers, there could be tensions, given the very substantial state support NEST enjoys."

Society of Pension Consultants

"As NEST is ultimately funded by the taxpayer it will have an unfair advantage in terms of implicit government guarantee to cover operational risks and possibly even investment risk."

Dean Wetton Advisory

Managing expectations

"People must be warned that they should not rely on a minimum contribution to NEST, or minimum contributions to other workplace schemes into which they may be auto-enrolled, to provide a good income in retirement."

Financial Services Consumer Panel

Stifling job creation

"Pensions requirements are considered the top regulatory barrier to taking on a first employee [according to] one in three sole traders. The 2012 reforms are seen as a significant barrier by entrepreneurs wishing to expand their staff numbers to grow their firm and could inhibit economic recovery."

British Chamber of Commerce