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Pensions: NEST

Answer

My department continues to work with the Personal Accounts Delivery Authority to refine cost estimates for NEST, which will ultimately depend on a number of factors including the size and nature of its membership, and the outcomes of a number of outstanding procurements. However, based on our current estimates, we envisage that the loans made to the NEST Corporation each year will be of the order of:

Year
2010/11*	£90-95m
2011/12	£65-70m
2012/13	£80-90m
2013/14	£85-100m
2014/15	£90-110m

"* Amounts for 2010/11 include amounts lent to PADA in 2010/11 prior to NEST Corporation being established" The period in which the loan to NEST Corporation will be repaid will also depend on a variety of factors, including the final costs of NEST and the size and nature of its membership. We anticipate that the total loan period, including the years in which NEST borrows from Government and the subsequent repayments, will last in the region of 20 years. The terms and conditions of the loan agreement between my department and the NEST Corporation will not be finalised until after the NEST Corporation has been established. We anticipate, however, that the loan will be given at a commercial rate of interest in accordance with government-lending rules and that, in recognition of the extra costs NEST faces in fulfilling its public service obligation to accept all those employers who wish to use the scheme, NEST will be provided with interest relief to reduce the finance costs its members will bear to the Government's own cost of borrowing.

Secondary information

Type

Written question

Reference

2933; 718 c371WA

Session

2009-10

Subjects

Interest charges Loans Repayments National Employment Savings Trust Corporation

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk