Am I the cuckoo in the Nest?

I am writing this blog as a corollary to this morning’s complaint that pensions are failing the country by investing in “risk-free” Government debt rather than in the equity of this country’s enterprises.

This blog explains how, in creating elaborate member protections , the Government’s own pension, is creating problems for small companies hoping to be big companies.

When I set up AgeWage in 2018, we set up a corporate account with Nest and became a participating employer. We still are, we have never missed a payment. Despite this , we get angry letters from Nest every quarter telling us that we are not complying with  the auto-enrolment legislation. These have been a complete mystery to us.

Yesterday, while trying to transfer my pot away from Nest, for reasons I’ll come back to, I was sent this letter , downloaded from a secure site.

Dear Henry
We’ve processed your request for AgeWage Limited to stop making contributions
You told us on 17 October 2024 that you want to stop your employer, AgeWage Limited,
making contributions to your Nest retirement pot.

On 17 October 2024 we wrote to AgeWage Limited to ask them to stop making these
contributions.

What happens now?
AgeWage Limited should make contributions to your retirement pot until the date we
complete your request to stop making contributions. We’ll add these contributions to your pot.

Please note employers have a duty under law to re-enrol employees into pension saving
approximately every three years. However, if you want to continue contributions with
AgeWage Limited before this, you’ll need to ask your employer to enrol you back into Nest

I have not had a contribution paid into Nest since May 2023. We haven’t told Nest we are stopping contributions, I just haven’t had any salary since then. This is down to AgeWage not being able to afford to pay me.

Many entrepreneurs stop getting paid to keep their companies going, but despite my salary showing as zero on our Nest schedules, Nest chose to remind us of our breaches (presumably in not paying me).

Now back to the transfer; I had hoped to take my tax-free cash out of my DC pensions and have succeeded in doing so with L&G , while keeping my fund invested. I researched Nest and discovered that I couldn’t do this with Nest. Nest require me to enter into a wallet affair with them or cash out or buy an annuity, I didn’t want to do any of these things so the only option left me was to transfer my Nest account to my other provider and get my cash that way.

But this I could not do.

Instead of processing my transfer claim, Nest sent me a nine page letter demanding my employer wrote me a letter explaining why I had had no contributions since May 2023. It required sight of payslips and disclaimers and by the time I’d read the 9 pages, I was so confused I wrote to the person sending it (who I know) and he was kind enough to write back explaining firstly that he was looking into it and secondly that Mark Rowlands and his team were working on a way for Nest Savers to get their cash independently of the rest of their pot.

But this was not enough.

In the end , I had to send Nest a letter explaining that I was still employed at AgeWage but not receiving a wage. This state of affairs was interpreted as me “stopping contributions”, something which I had not said I was doing. I wanted my money in Nest to be transferred elsewhere so I could stay invested in a way Nest would not let me.

So here I am, I appear to have been opted out of Nest , though I have no intention of stopping contributions in the future. Things have picked up at AgeWage and by Christmas I will start being paid again. I may have had to start a new Nest pension account if I’d transferred out but I’m not going to transfer anymore, the ship has sailed. If Rachel Reeves decided to cap my tax free cash then I’ll take all my Nest money as pension and rue my inability to get my cash out as a PCLS.

I have wasted huge amounts of time getting nowhere, Nest has sent me countless pro-forma letters and all that has happened is that they have closed my account (not as I intended).

In all this time, I have not spoken to anyone at Nest, nor have my colleagues who run the admin of our payments.

I really like “big” Nest, I am a fan of its investment team and its trustees and the driving principal of the organisation. But Nest is here to serve the millions of small businesses like us. We only send them a few thousand pounds a month and don’t expect any favors. But we do expect to be treated as people and not as ciphers.

My experience must be echoed by thousands of employers up and down the land. As an entrepreneur, I made a decision to keep my company going by not paying myself,. I am seriously out of pocket but it was my decision. Nest have decided that my company could be scamming me and has sent me expensively crafted letters telling me that.

This whole ludicrous state of affairs could have been stopped by someone getting on the phone to me and asking the simple question – “what do I want?”.

I can understand that Nest thinks that all companies behave like they do and pay people a regular wage, but many small businesses don’t. They really have no process to deal with the vagaries of the start-up and no systems to help those who’ve saved, take their money as they are entitled to.

In a few days, I will be 63, I have had the right to my pension money for nearly 8 years, three quarters of the time that Nest has been up and running. In that time, and in the 10 years since the announcement of the pension freedoms, Nest doesn’t seem to have progressed its contribution processes or its at retirement options at all.

I rather think that some of the people in charge of product development at Nest, are rather less-deserving of a wage, than I am.

It’s rather easier to put money into Nest than take it out, and woe betide you if you stop earning and stay employed!