Top Alternatives To A Nest Workplace Pension

Is Nest A Good Workplace Pension?

The scheme that works best for your company will depend on what you need from it. Nest is a popular pension option for small and medium-sized businesses.

Many chose Nest for ease of setup and fulfilment of legal obligations. But it might not be an effective scheme for all business types.

Nest might not be the best option for larger businesses, or those paying high salaries or enhanced pension contributions. It’s better matched to businesses whose primary objective is to meet their lawful obligations and those employing seasonal and/or temporary staff with a high turnover rate.

Disadvantages Of Nest

There are several disadvantages to Nest pension schemes, including:

Could Be Subject To Inheritance Tax

Should an employee die before accessing their pension savings, inheritance tax may apply.

If they’ve nominated someone to receive their savings, the pension pot will form part of their estate. As a result, the employee’s assets become liable for inheritance tax.

Expensive Charging Structure

Nest can be an expensive option for those paying in regular contributions. There is an Annual Management Charge of 0.3% but there is also a contribution fee which is set at 1.8%.

Nest is the only pension provider to charge a contribution fee.

An employee contributing £500 a month with a pension worth £50,000 would pay £258 a year. This covers the contribution fee and Annual Management Charge.

This additional contribution charge, when compounded over the many years to retirement, can have a significant impact on the employees’ overall retirement fund value.

Limited Fund Range

Where Nest was introduced as a fallback, the investment range is very limited. Nest has only 7 funds available and very limited options for those wanting Ethical or Sharia Investments.

There are 7 strategy types:

• Default growth
• Higher risk
• Ethical
• Lower growth
• Sharia compliant
• Pre retirement
• Guided retirement.

Does Not Support SMART Salary Sacrifice

Employers who want to support their employees as much as they can when it comes to saving for retirement can ensure employees maximise their contributions and tax relief with SMART Salary Sacrifice contributions.

As it stands, Nest does not support SMART Salary Sacrifice although they do support Simple Salary Sacrifice.

Limited Communication To Promote Scheme

Many of the best Workplace Pension scheme providers offer a whole suite of supporting communication to help you educate your staff on the benefits of saving for retirement.

These communications can include template emails, posters, infographics, videos, and calculators. There is less support from Nest and you will need to undertake a lot of the communication yourself.

Factors To Consider When Looking To Switch From A Nest Workplace Pension

A Nest pension scheme may be suitable for some businesses, but not all. It’s often the default option and many employers don’t consider the alternatives.

You can switch Workplace Pension providers if your existing scheme isn’t the best fit. At Drewberry, our employee benefit advisers can help you find the best Workplace Pension for your needs..

We can also help set it up and build out your communications strategy. If you’d like extra help with your Workplace Pension, don’t hesitate to get in touch with us by calling 02074425880 or email us at help@drewberry.co.uk.

Here are some factors to consider when switching from a Nest pension to another provider. These can help you find the best fit for your company and employees.

How Much Does The Scheme Cost?

Employee benefits don’t come for free. It costs an employer to offer a Workplace Pension. Being aware of the potential costs is important, as you’ll need to factor them into your budget.

Set Up Fees

How much a pension scheme costs to set up depends on factors, including:

• The pension provider you have chosen
• How much external support you need
• Payroll configuration.

Some pension providers will ask for a one-off fee to cover the setup of your Workplace Pension. This will vary in price depending on the pension provider. For example, one requires a £500 setup fee, plus VAT, which is lowered to £300 if you use a financial adviser.

Not all providers have a setup fee. Some opt for monthly fees or annual charges instead, and others do not charge a fee at all.

Cost of Financial Adviser

Setting up a Workplace Pension scheme can be challenging. Many companies choose to work with an adviser as a result. An adviser can help you set the pension up and ensure it meets the legal obligations. Receiving guidance from an adviser will cost. The price of which depends on the amount of support you need.

Cost of Payroll Configuration

Most payroll software is compatible with auto enrolment. But if it isn’t, configuration may be necessary. It also needs upkeep to ensure employees are enrolled as soon as they become eligible. There are companies you can outsource payroll tasks to for a monthly fee, which may be of use if the admin is too hefty.

Ongoing Costs

It’s important to review your Workplace Pension regularly to make sure it’s still valuable. As an employer, you can do this yourself. But support from an independent financial adviser can ensure you’ve ticked all the boxes.

The cost of external support will depend on:

• The level of support you need
• Your business size
• How long you need support for.

You might face hourly rate charges between £70 and £350. Some do charge a setup fee, though, which can be in the thousands, to cover ongoing support.

Employers may also have to pay fees every month to cover the management and running costs of the scheme. This depends on your chosen provider. For example, Aviva charges between £30 and £50 a month. You’ll get a discount if you’re not using all the provider’s services.

Annual Management Charge

Most Workplace Pension providers charge an Annual Management Charge (AMC).

Nest has a 0.3% AMC on the total value of the pension fund, for example. It also includes a 1.8% contribution charge, which can really start to add up with a highly paid workforce.

By law, the AMC charge cap is 0.75%. You may find that your chosen pension provider has a single cost in the AMC rather than separate costs for scheme set-up and other services.

Which Tax Relief Method Is Best For Your Company?

Income Tax and NI will apply to pension contributions depending on how the scheme is set up. As an employer, you’ll need to consider how the tax works and which tax relief method is most valuable to employees.

There are several ways HMRC can tax your company pension scheme. This determines how and whether your employees save money on their tax contributions.

• Relief At Source (RAS)
• Net Pay
• Simple Salary Sacrifice
• SMART Salary Sacrifice

Can You Utilise Salary Sacrifice?

Companies can use salary sacrifice for their workplace pension schemes. Salary sacrifice works by an employee sacrificing part of their gross monthly pay for a non-cash benefit, like a pension contribution. It doesn’t lower their take-home pay and provides tax savings for both the employer and employee.

The money saved by the employee is either added to their pension fund or take-home pay. The money saved by the employer is either directed to the employee’s pension fund, retained by the employer, or a mixed economy of the two.

Many companies take the opportunity to move to Salary Sacrifice when they look at alternatives to Nest.

Depending on the size of your workforce, there are potentially thousands of pounds to be saved by switching to salary sacrifice both for the employer and employee.

Is There A Variety Of Investment Funds?

Workplace Pension scheme providers will offer many investment options. But each provider will use its own default fund unless employees choose another fund.

When comparing Workplace Pension providers, check the variety of investments they offer. Do they have any ethical or Sharia-compliant funds? A range of options means employees can invest their money in a fund that suits them. They might prefer to invest in a fund with higher-risk levels, for example. It also provides extra value and makes a pension more appealing.

Is Your Business Eligible?

Some Workplace Pension providers may place restrictions on which businesses are eligible. This tends to be based on the number of employees your company has. Major providers typically have a 5 employee minimum. This refers to how many employees are employed, not enrolled in the scheme.

The type of employee plays a part too. Nest, for example, is best for businesses hiring temporary and seasonal staff as it’s low risk. Companies with high turnover might not be eligible for major providers due to the administration and risk involved.

Top Workplace Pension Alternatives To Nest

Nest isn’t the only company pension scheme on the market. Many companies might have picked this scheme to quickly fulfil their auto-enrolment requirements. The problem with this approach is that they might not have considered other options.

With that in mind, here are some Workplace Pension alternatives to Nest. Remember, the most suitable provider for your business won’t necessarily be the best for another, as it all depends on your specific needs and circumstances. That’s why it’s important to carefully compare schemes.

The below list has been put together by considering product offering, longevity, and customer reviews.

Aegon

Comprehensive platform for choice and scale

Aegon UK offers a highly flexible Workplace Pension platform geared to employers who value choice and adviser support.

It’s picked up industry awards for its “Mylo” digital service, reinforcing its emphasis on innovation.

Key Facts

• Tax relief method: Relief at Source / salary sacrifice
• Employee charges: Varies by scheme
• Employer fees: Varies by scheme
• Ethical funds: Extensive ethical / ESG fund menu.

Why Choose Aegon Workplace Pension

Aegon stands out for its flexibility and breadth of investment options, with over 4,500 funds including extensive ethical and ESG offerings. Its platform caters to employers who want choice and adviser support, and its award-winning “Mylo” digital service enhances member engagement.

For employers with medium-to-large schemes, Aegon’s extensive fund range, combined with scalable administration tools and strong adviser support, makes it a highly adaptable option.

While cost structures vary by employer, its transparency and platform capabilities allow HR teams to deliver a tailored pension experience aligned with both employee needs and corporate ESG goals.

Enquire about an Aegon scheme

Aviva

Large fund range and strong ESG credentials

Aviva is one of the best-known names in UK pensions, offering a full-service Workplace Pension proposition that spans master trust and contract-based arrangements. In 2025 it earned gold ratings across its Workplace ARC, Designer and My Money trust offers.

Its “My Future Vision” default strategy now incorporates a 15-year glidepath and private markets exposure.

Key Facts

• Tax relief method: Relief at Source (with Net Pay / salary sacrifice options)
• Employee charges: AMC capped at 0.75 % (within default solution)
• Employer fees: Varies between schemes
• Ethical funds: Extensive ethical / ESG fund menu.

Why Choose Aviva Workplace Pension

Aviva is ideal for employers looking for a comprehensive, flexible Workplace Pension solution. It offers an extensive range of investment funds, including stewardship-led and sustainable options, alongside a well-regarded default lifestyle fund, “My Future Vision.”

Its platform supports both master trust and contract-based arrangements, enabling large organisations to scale effortlessly while meeting auto-enrolment requirements. Aviva also provides strong digital tools for both employers and employees, including payroll integration, reporting dashboards, and online portals, which reduce administrative burden.

For HR teams prioritising ESG credentials and robust fund selection, Aviva offers one of the most mature, award-winning pension propositions in the UK.

Enquire about an Aviva scheme

now:pensions

Streamlined auto-enrolment solution

now:pensions was originally set up by ATP of Denmark for employers requiring a scheme to fulfil their automatic enrolment. It’s a streamlined master trust designed particularly with small- to medium-sized employers in mind.

Key Facts

• Tax relief method: Net Pay
• Employee charges: AMC 0.30 % (for default investment)
• Employer fees: Employer cost £36+ VAT per month (if direct)
• Ethical funds: Limited ESG / ethical options (mostly built into default).

Why Choose now:pensions Workplace Pension

The scheme is notable for its simplicity and competitive charging structure. As a provider focused on easier setup and straightforward administration, it may be especially suitable for HR teams seeking minimal friction in implementation and ongoing management.

Enquire about a now:pensions scheme

The People’s Pension

Low-cost option for small employers

The People’s Pension is run by People’s Partnership, a not-for-profit organisation. Founded in 1942, it started with a holiday savings scheme for the construction industry, and went on to deliver products that were simple to implement, beneficial for workers, and hassle-free for employers.

Key Facts

• Tax relief method: Relief at Source by default, can switch to Net Pay
• Employee charges: AMC 0.50% + small flat fee
• Employer fees: Set-up fee £300–£500+ VAT (lower if using an adviser)
• Ethical funds: 1 true ethical fund, others with ESG tilt.

Why Choose People’s Pension Workplace Pension

The People’s Pension is recognised as the UK’s largest independent commercial master trust scheme, serving over 7 million members across some 100,000+ employers.

Its not-for-profit model (profits reinvested for members) and awards for responsible investment stewardship make it an appealing choice for employers looking to deliver value and sustainability in their pension proposition.

Enquire about a People’s Pension scheme

Royal London

Mutual provider with strong service reputation

Royal London began as a friendly society in 1861, later changing to a mutual society in 1908. Over the years it has become the UK’s largest mutual life, pensions and investment company.

Royal London is committed to providing the very best experience and prides itself on delivering standout service and support.

Key Facts

• Tax relief method: Relief at Source / salary sacrifice
• Employee charges: AMC up to 0.75 % (within default)
• Employer fees: Often £0 for employer for standard schemes
• Ethical funds: Several ESG / sustainable funds in their range.

Why Choose Royal London Workplace Pension

Royal London is a mutually owned provider (i.e., no external shareholders) and in recent years has focused on enhancing its Workplace Pensions offering.

The mutual structure may appeal to employers wanting a provider that shares profits with members and emphasises customer-led service.

Enquire about a Royal London scheme

Scottish Widows

Trusted brand and solid online tools

Scottish Widows, part of the Lloyds Banking Group, is a major player in UK defined-contribution workplace pensions. Originally set up in 1815 to protect women who’d lost their husbands, fathers, and brothers in the Napoleonic War – it now supports its customers in making the most of their financial future.

Key Facts

• Tax relief method: Relief at Source / salary sacrifice
• Employee charges: AMC varies between schemes
• Employer fees: Usually £0 employer setup (for many schemes)
• Ethical funds: Multiple ethical / ESG funds.

Why Choose Scottish Widows Workplace Pension

Scottish Widows has made a strong push on its digital capability (one million+ digitally registered users) and is now ranked second by size in the UK DC provider market.

For mid to large-sized businesses, Scottish Widows offers scale, recognised brand and a wide fund choice.

Enquire about a Scottish Widows scheme

Need Help Switching From Nest?

Choosing the right Workplace Pension scheme for your company can be challenging. We know that pensions are a complex topic, but your Workplace Pension is essential for your employees.

If you’d like advice on switching your Workplace Pension provider, our pension specialists can help you find the best scheme for your company. We’ll talk you through your options and support the set up process. Contact us today on 02074425880 or email at help@drewberry.co.uk.

Why Speak to Us?

Employee benefits can be a headache. But our specialists do this day-in, day-out, offering first class service when you need it most. Here’s why you should talk to us:

• Award-winning independent employee benefits consultants, working with leading UK insurers and benefit providers
• Assigned specialist on hand to help – every step of the way
• 4084 and growing independent client reviews rating us at 4.92 / 5
• Authorised and regulated by the Financial Conduct Authority. Find us on the financial services register
• Claims support when you need it most.