NEST Pre-Retirement Strategy

July 12th, 2015

The National Employment Savings Trust (NEST) has developed a strategy for retirement for the pension funds accumulated by workers. After extensive research it has concluded that in the first phase of retirement from ages 60 to 70 it is best to leave the fund invested in a mixture of financial assets, but with 10% in cash available for unexpected needs. Between 70 and 80 the funds intended to provide income are locked in, and in the third phase (80 plus) the capital is used to buy annuities for income security. Employees will be able to opt out of these ‘default’ solutions if they wish.

The NEST solution endorses the use of ‘drawdown’ in the early years of retirement, which is also the approach that will suit many people with other types of personal and company pensions.