Nest’s net expenditure drops as DWP loan increases to £623m

Nest’s government loan increased to £623m over the 2017/2018 financial year, it has revealed.

In its latest annual report and accounts, Nest Corporation revealed that it has now built up £32.2m in interest on its DWP loan. Its net expenditure after interest was down to £76.5m last year (compared to £87m the year before), with total expenditure coming to £139.2m. £21m of that was spent on staff costs, while £86m went on other expenditure including administration and scheme investment costs.

In the last financial year, Nest helped more than 289,000 employers auto enrol 1.9 million workers and ended up managing £2.7bn on behalf of approximately 6.4 million members and 616,000 employers. This is compared to £1.7bn for 4.5 million members and 327,000 employers at the same time last year. The pension provider’s charge revenue from contributions and members assets under management have subsequently increased from £15m to £26m.

Nest has delivered average returns of 8.8 per cent per annum (after all charges) over the last five years for funds in the growth phase of its default strategy.

As of July 2018, Nest’s membership was around 6.8 million members, resulting in it having more than £3bn in assets under management.

The pension provider has also said that it will no longer be both a non-departmental public body and a public corporation, but will continue in future as a public corporation only.

Otto Thoresen, Nest’s corporation chair, said that the annual report and accounts demonstrated its commitment to transparency.

“We’re confident that our long-term financial projections are robust and that we’ll continue to deliver value to our members, while also providing value for money to the taxpayer,” he said.

Helen Dean, Nest’s chief executive officer, said: “Staging has been a once-in-a-lifetime event and a unique challenge. At its peak, we saw more than 1,800 employers sign up to NEST in a single working day, compared to 500 per year at earlier stages of auto-enrolment.

“It’s testament to everyone here at Nest that we’ve been able to handle these unprecedented volumes of new business with exceptional efficiency and supported every employer who wanted to use us.

“We’ve also helped lead the way in developing our innovative retirement date funds and responsible investment strategies. We don’t want to settle for doing the minimum but are finding ways to help drive improvements right across the pensions industry.”

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