Choosing a Pension Provider
How do you choose a workplace pension provider? Compare options for auto-enrolment including NEST and other providers.
Last updated: 30 January 2025
Choosing the right pension provider affects your employees' retirement savings.
Provider Options
Main Types
| Type | Examples |
|---|---|
| Master trusts | NEST, People's Pension |
| Group personal pensions | Insurance companies |
| Stakeholder pensions | Various providers |
| Occupational schemes | Own or industry |
Master Trusts
| Provider | Key Features |
|---|---|
| NEST | Must accept all, low charges |
| People's Pension | Popular, good service |
| NOW: Pensions | Flexible contributions |
| Smart Pension | Technology-focused |
NEST
Key Features
| Feature | Detail |
|---|---|
| Must accept | All employers |
| Government-backed | Trust-based |
| Low charges | 0.3% AMC + £1.80 |
| Simple | Easy to use |
Advantages
| Benefit | Detail |
|---|---|
| Guaranteed acceptance | Cannot refuse |
| Low minimum | No size requirement |
| Simple admin | Online portal |
| Cost-effective | Competitive fees |
Considerations
| Factor | Note |
|---|---|
| Contribution limit | None anymore |
| Transfer restrictions | Some limitations |
| Investment options | Limited but good |
People's Pension
Key Features
| Feature | Detail |
|---|---|
| Master trust | B&CE |
| No employer charges | Free to join |
| Low AMC | Competitive |
| Good service | Reputation |
Advantages
| Benefit | Detail |
|---|---|
| No employer fees | Cost saving |
| Easy setup | Straightforward |
| Good support | Helpful |
| Payroll integration | Many systems |
Comparison Factors
Charges
| Charge Type | Compare |
|---|---|
| Annual Management Charge | % of pot |
| Contribution charge | Per payment |
| Administration fee | If any |
| Exit charges | If any |
Typical Charges
| Provider | AMC | Contribution |
|---|---|---|
| NEST | 0.3% | £1.80 (1.8%) |
| People's Pension | 0.5% | None |
| NOW: Pensions | 0.3% | £1.50 |
Impact of Charges
| Example | Lower Charges |
|---|---|
| £50k pot | Over career |
| 0.3% AMC | £150/year |
| 0.75% AMC | £375/year |
| Difference | £225/year |
Administration
Ease of Use
| Factor | Consider |
|---|---|
| Online portal | Quality |
| Data upload | Methods |
| Reporting | Capabilities |
| User interface | Intuitive? |
Payroll Integration
| Feature | Importance |
|---|---|
| Compatible systems | Which software? |
| Data format | Requirements |
| Automation | Available? |
| Manual option | If needed |
Investment Options
Default Fund
| Consideration | Why Important |
|---|---|
| Strategy | Growth/protection |
| Diversification | Risk spread |
| Lifecycle | Age-related |
| Performance | Track record |
Choice Available
| Option | Detail |
|---|---|
| Single default | Simple |
| Limited choice | Few options |
| Wide range | Many funds |
| Ethical options | For those wanting |
Service and Support
Employer Support
| Feature | Look For |
|---|---|
| Helpline | Availability |
| Online resources | Quality |
| Onboarding | Support |
| Ongoing help | Responsiveness |
Employee Support
| Feature | Look For |
|---|---|
| Member helpline | Access |
| Online account | Features |
| App | Mobile access |
| Communications | Quality |
Making the Choice
Questions to Ask
| Question | Why |
|---|---|
| Will you accept us? | Not all will |
| What charges apply? | All fees |
| How easy to use? | Admin burden |
| What investments? | Choice |
| What support? | Help available |
Decision Factors
| Factor | Weight |
|---|---|
| Acceptance | Essential |
| Charges | High |
| Ease of use | Medium |
| Investments | Medium |
| Service | Medium |
For Small Employers
Good Options
| Provider | Why |
|---|---|
| NEST | Must accept, simple |
| People's Pension | No employer fees |
| NOW: Pensions | Low charges |
Considerations
| Factor | For Small |
|---|---|
| Minimum size | Any requirement? |
| Charges | Per contribution? |
| Simplicity | Important |
| Support | Available? |
For Larger Employers
Additional Options
| Option | Why Consider |
|---|---|
| Group personal | More flexibility |
| Own scheme | Bespoke |
| Negotiated rates | Volume discounts |
Considerations
| Factor | For Larger |
|---|---|
| Volume discounts | Possible |
| Bespoke service | Available |
| Integration | With HR systems |
| Reporting | Comprehensive |
Switching Providers
Can You Switch?
| Position | Detail |
|---|---|
| Can switch | Providers |
| Process | Administrative |
| Employee pots | May or may not move |
| Consider | Disruption |
When to Consider
| Reason | Example |
|---|---|
| High charges | Better available |
| Poor service | Problems |
| Better features | New options |
| Business change | Different needs |
Getting Started
Steps
| Step | Action |
|---|---|
| 1 | Research options |
| 2 | Compare providers |
| 3 | Check acceptance |
| 4 | Agree terms |
| 5 | Set up scheme |
| 6 | Start enrolling |
Timeline
| Task | Allow |
|---|---|
| Research | 2-4 weeks |
| Selection | 1-2 weeks |
| Setup | 2-4 weeks |
| Total | 5-10 weeks |
Summary
Key Comparison Points
| Factor | Compare |
|---|---|
| Charges | Total cost |
| Acceptance | Will take you |
| Administration | Ease of use |
| Investments | Options |
| Service | Support quality |
Common Choices
| Employer Size | Consider |
|---|---|
| Micro (1-5) | NEST, People's |
| Small (6-49) | People's, NOW, NEST |
| Medium (50+) | People's, GPPs, NEST |
Related answers
Auto-Enrolment Overview
What is workplace pension auto-enrolment? Understand the UK's automatic enrolment system and employer duties for pension contributions.
Pension Scheme Charges
What charges apply to workplace pensions? Understand annual management charges and how they affect pension pots.
Qualifying Pension Scheme
What is a qualifying pension scheme? Understand the requirements for auto-enrolment pension schemes.
Frequently Asked Questions
- What pension providers can I use for auto-enrolment?
- You can use any qualifying scheme - master trusts (NEST, People's Pension, NOW: Pensions), group personal pensions, or stakeholder pensions. NEST must accept all employers, while others can choose whether to work with you.
- Is NEST the best option for small employers?
- NEST is a solid choice for small employers - it must accept everyone, has low charges, and is simple to use. However, other providers may offer better features, lower charges for larger employers, or more investment options.
- What should I compare when choosing a provider?
- Compare charges (annual management, contribution fees), investment options, administration ease, payroll compatibility, customer service, and any minimum requirements. Also check they qualify for auto-enrolment and will accept your workers.