Following announcements of the National Employment Savings Trust's (NEST) charging structure, Friends Provident is calling for a review of stakeholder regulations to ensure providers have a level playing field.

The provider said the proposed NEST charging structure is inconsistent with the pricing structure in stakeholder schemes, which has meant providers have been unable to take any contribution charges since the Stakeholder launch ten years ago. Friends Provident said this leads to long payback periods.

The inclusion of continuation charges, as set out by the Government for NEST, allows for the scheme to compete of a fair basis with the existing market place, Friends Provident said.

"It is telling that when the Government has to fund the large development outlay for NEST, they have come to the conclusion that a contribution charge is required to reduce payback periods," commented Martin Palmer, head of pensions marketing at Friends Provident. "It is disappointing that it has taken the Government ten years to come to this conclusion."

The two per cent contribution charge for NEST will continue for a substantial timeframe due to the period over which the contributions and funds build up. This, Friends Provident said, means that it could be as late as 2017 before final contribution levels are reached.

"It is crucial the Government is open about how long this contribution charge will last (and the assumptions behind this) - it is important that people understand this before they start contributing to NEST - in the same way that providers have to fully disclose all their charges up front," Palmer concluded.

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