Low-cost pension scheme to be known as Nest

The Personal Accounts Delivery Authority (PADA) said personal accounts would be branded the National Employment Savings Trust, or Nest for short.

The scheme, which is aimed at people on low or moderate earnings who do not currently have access to a pension, will be available in low volumes from 2011.

Its introduction is part of Government pension reforms being phased in from 2012, under which all workers earning above a certain level will automatically be enrolled into a company pension scheme or Nest, although they will retain the right to opt out.

Individuals will have to pay in at least 4 per cent of their salary to the scheme, with employers contributing 3 per cent and the Government adding 1 per cent.

However, contribution levels will be phased in gradually to enable workers and companies to adjust to the costs.

Tim Jones, chief executive of the PADA, said: "We need a brand which will resonate with the scheme's potential members; with Nest we believe we will achieve that.

"We have followed a detailed, research-based process to ensure this will be a brand designed by members, for members. Nest is clearly favoured by both potential members and employers."

Minister for pension reform Angela Eagle said: "This Government's radical reforms to the pensions system will ensure millions of workers on low and moderate incomes are able to save for their retirement in a workplace pension with a new guaranteed minimum contribution from their employer.

"Nest will play a key role in this and help transform attitudes to saving."

The scheme will be run by the not-for-profit Nest Corporation.

The announcement was welcomed by the National Association of Pension Funds. Its chief executive, Joanne Segars, said: "We all need a pension nest egg to enjoy a comfortable retirement. Already, almost 12 million people are saving in a workplace pension with contributions from their employer.