NEST is a parastatal set up in competition to private sector pensions providers. Because it is heavily subsidised by the Departent for Work and Pensions ("DWP"), it could make it harder for private sector providers to compete, force many out of business, resulting in consolidating of the maret and a loss of innovation and choice for employers and consumers.
NEST's annual report shows the DWP loan has increased by 30 per cent to £387m, up from £300m 12 months ago. In addition, an annual DWP grant used to pay off the loan increased from £10.2m to £12.7m this year. (Summer 2015)
One commentator noted that: "NEST was borne of the typically erroneous presumption on the part of a bunch of blinkered civil servants that private sector providers are over-charging and ripping off consumers. Now they’re trying to do it themselves, they find that it can’t be done for peanuts."