Now however, the system is all set to go; and guess what? It is really expensive, becuase the payments in are small there is little scalable savings. As such the administrator is putting a 2% fee on all joiners to help cover costs. So if you are joining say 5 years before retirement this will be quite a chunk of your money.
The Times has a good article with an excellent quote from pensions expert Ros Altman:
“The idea of taking away 2 per cent of people’s money before they even start saving strikes me as high, but of course the costs of administering tiny pots of money for decades is also high. Call me cynical, but this scheme has disaster written all over it.”My bet is that this whole thing is wound up within 5 years and a huge write-down is taken by the Government to refund everyones money.
Labour Minister Angela Eagle's view is funny too:
“Market failure for low and moderate earners means they have not had access to a suitable low-cost pension scheme and have not been able to save for their retirement. Nest will put this right.”For market failure read lack of saving by the people, plus no economic way of creating a return plus Government State pension being the direct, free competition. But now the Government are wading in to turn this around for the better....