Is It Time to Review Your Company Pension? Why Many SMEs Are Moving Away from NEST
By Samuel Mather-Holgate
If you’re an SME director, part of an HR team, or responsible for payroll, chances are your company pension scheme hasn’t had much attention since auto-enrolment first arrived.
For many businesses, the decision was simple at the time:
“We’ll just use NEST — it ticks the box.”
Fast forward a few years, and many employers are now asking a different question:
“Is NEST still the right pension scheme for our business and our employees?”
In many cases, the honest answer is no.
Why So Many SMEs Chose NEST (And Why That’s Changing)
When auto-enrolment was introduced, NEST was designed as a default solution — particularly for employers who:
Had never run a pension scheme before
Wanted something quick and compliant
Had small workforces and limited admin support
NEST served a purpose.
But it was never designed to be the best solution — just an accessible one.
Today, the market looks very different.
The Most Common Issues SMEs Raise About NEST
We regularly speak to SME owners and managers who tell us the same things:
❌ Limited investment choice
NEST offers a relatively narrow range of funds compared to modern workplace pensions. Many employees want:
Ethical / ESG options
Higher-growth strategies
Age-targeted investment paths
❌ Charges that quietly add up
While NEST’s headline fees can look competitive, the contribution charge can materially impact long-term outcomes for members.
❌ Poor employee engagement
Employees often don’t understand:
Where their money is invested
How to make changes
Whether the pension is “good” or just “there”
❌ Admin and payroll frustrations
For some employers, NEST can feel rigid — especially as businesses grow or payroll becomes more complex.
Can You Change Your Workplace Pension Provider?
Yes — and this surprises a lot of employers.
There is no rule that says you must stay with the pension provider you originally chose for auto-enrolment.
Employers are free to:
Review their pension scheme
Change provider
Improve investment options
Reduce costs
Enhance employee benefits
As long as the scheme meets auto-enrolment requirements, switching is perfectly allowed — and often sensible.
What Are the Alternatives to NEST for SMEs?
The workplace pension market has evolved significantly.
Many modern schemes now offer:
Wider investment choice
Lower or more transparent charges
Better online access for employees
Smoother payroll integration
Improved employer reporting
Support with employee communications
Crucially, many alternatives scale far better as your business grows.
Why Reviewing Your Company Pension Is Now a Governance Issue
This is an important point.
While employers aren’t expected to constantly change schemes, there is an expectation that pension arrangements are:
Suitable
Value for money
Fit for purpose
Doing nothing for 5–10 years simply because “it’s always been that way” can leave directors uncomfortable if challenged.
A regular pension review demonstrates good governance and responsible employer behaviour.
What a Proper SME Pension Review Should Cover
A professional workplace pension review should look at:
Provider charges (employer & employee impact)
Investment performance and suitability
Default fund design
Employee engagement tools
Payroll integration and admin burden
Support for different employee demographics
Long-term scalability
Future regulatory changes
It’s not about selling a product — it’s about ensuring the scheme still works.
The Hidden Opportunity: Employee Benefits Beyond the Pension
For many SMEs, reviewing the pension opens the door to broader employee benefits, such as:
Death-in-service cover
Group income protection
Relevant life policies for directors
Shareholder protection planning
Better engagement with senior staff
These benefits can often be added cost-effectively when structured properly.
Why Use an Independent Financial Adviser for a Company Pension Review?
An independent adviser:
Isn’t tied to NEST or any single provider
Can compare the whole market
Focuses on outcomes, not just compliance
Works with directors, HR and payroll together
Helps with employee communications
Ensures changes are implemented smoothly
Most importantly, they act in the best interests of both employer and employees.
Frequently Asked Questions
Is NEST a bad pension scheme?
No — it’s not “bad”. But for many growing SMEs, it’s no longer the best option available.
How often should an employer review their workplace pension?
Typically every 2–3 years, or sooner if the business has grown, changed payroll systems, or employee needs have evolved.
Will changing pension provider create extra work?
With the right adviser, disruption is minimal. Payroll and communications can be managed smoothly.
Do employers have a duty to review pensions?
While not legally mandated, regular reviews demonstrate good governance and responsible employer behaviour.
Is It Time to Review Your Company Pension?
If your workplace pension hasn’t been reviewed since auto-enrolment began — or if it’s still with NEST by default — now is the right time to ask whether it truly serves your business and your employees.
A review doesn’t mean change.
But not reviewing at all is often the bigger risk.
If it’s time to review your company pension, BOOK A CALL BACK or use our form to CONTACT US and arrange a meeting with our of our independent financial advisers.
