Employers' interest in NEST plummets

Just one in 20 employers intends to use the National Employment Savings Trust (NEST) for auto-enrolment, according to Punter Southall research.

A survey of more than 150 employers found 5% of respondents intend to use NEST, down from 13% last year.

Only 6% intend to use a new pension scheme, with most employers planning to amend their existing pension scheme to meet the new requirements.

Punter Southall principal Alan Morahan, pictured, said the lack of interest in newly-launched schemes would be a "concern for new providers".

NOW Pensions, B&CE, Dean Wetton Advisory other master trust arrangements have entered the market to compete for auto-enrolment clients.

However the survey found only 2% of employers were considering a master trust, with 77% intending to use contract-based defined contribution (DC) schemes.

Morahan added: "We do not think existing pension providers should take too much comfort because it is likely many schemes will be found to have deficiencies against the final auto-enrolment regulations and some will have to be restructured."

NEST chief executive Tim Jones dismissed the findings.

He said: "We are already working with over 100 employers large and small who have signed up to use NEST early.

"We expect to have between two to five million members by the end of staging and to work with hundreds of thousands of employers.

"While research like this is always of interest, it does not reflect our current experiences with employers."

Punter Southall's annual survey found 10% of employers were unaware of their staging date, while 45% of those who believed they knew their date were planning for the wrong day.

More than half believed their current contributions met regulatory requirements, when they actually fell "well short".

The survey also found that almost three-quarters of companies intend to undertake a pensions review.