RIBA’s Pension Solution versus NEST – how they compare

Is it time to review your pension? Practices offering NEST as their auto-enrolment option may find the RIBA Pension Solution more cost-effective and with greater choice for ethical investing – so called ESG funds – more appealing to their staff.

Any practice with staff aged 22 and over and earning more than £10,000 a year will have automatically enrolled them in a company pension scheme. But are practices offering their employees access to the most cost-effective and most appropriate pension provider? We know that many may have opted for the NEST scheme, it’s the one that’s probably most familiar to those looking after auto-enrolment. What they might not have been aware of when they enrolled in NEST is the RIBA Pension Solution which provides better support, a great choice on where members place their money – including ESG funds – and has strong track record of the default investment fund delivering a favourable rate of return.

The good news is that whatever scheme architectural practices are running, switching over to the RIBA Pension Solution is as simple as signing a form and letting the team at RIBA do the rest. And there is no financial penalty whatsoever for employers or their staff on transferring pension funds into the scheme.

RIBA has partnered with Smart Pension to create a market-leading auto-enrolment pension scheme tailored for architects' practices and their employees. 

For employers opting for the RIBA Pension Solution, running a scheme could not be simpler.

But don’t just take our word for it. Stuart Stroud, managing director of Corpad Employee Benefits, an employee benefits consultancy firm which advises RIBA and its staff on pensions, has evaluated the two pension schemes to see how they fare.

Smart Pension was established in 2014 and supported by a number of global financial investors including Barclays, Chrysalis Investments, DWS, JP Morgan, Legal & General, Mitsubishi UFJ Financial Group, Natixis Investment Managers and Aquiline Capital Partners LLC.

The National Employment Savings Trust – or NEST – was funded by the government in 2011 ready for auto-enrolment. Both are authorised master trust arrangements and supervised by the Pensions Regulator.

From his extensive experience of working with both providers, Stuart Stroud’s view is that:

• RIBA’s Pension Solution (Smart Pension) has a lower overall investment charge for members compared to that of NEST. NEST’s charges (the amount paid each year by members) are set at 0.30% of the individuals fund per annum (known as annual management charge) plus a 1.8% contribution charge taken from the individuals pension plan, this equates to a 0.48% charge overall. As contributions increase due to the percentage of rising salary levels, this means that the contribution charge the member pays and the impact of it increases too. For the RIBA Pension Solution, Smart Pension charges are set at 0.25% of the fund per annum (known as annual management charge) plus a £1.25 per month member charge which is a fixed fee, so reduces the impact on the member’s account as their fund grow
• RIBA’s Pension Solution (Smart Pension) is noted for its stance on ethical and green investment and provides members with a greater choice of where they want their money to be invested, compared with NEST, which has more limited investment options. RIBA’s pension scheme’s default option has 100% of funds adhering to good environmental, social, and governance (ESG) criteria, which is one of the highest offerings on the market. Those enrolled in the scheme can choose to remain in the default fund or select from 17 alternative funds including Ethical and Shariah funds
• RIBA’s Pension Solution (Smart Pension) is easy for employers to administer. When operating a pension scheme with NEST, the workload for clients is increased and more onerous, with less dedicated support
• RIBA’s Pension Solution (Smart Pension) provides more proactive communications with members. NEST member support is provided by an online service. Smart Pension support and additional options are available through the member app ‘pension in your pocket’ online service. Smart has partnered with Alexa (Amazon) so an individual can link their pension plan to their account and request a fund value at any time through their smart speaker/tech. Smart Rewards, which provides discounted shopping are complimentary as a Smart Pension member

Investment table

Past investment performance figures of the NEST and Smart Pension default investment funds are outlined below (though Stroud makes the obvious point that past investment performance is no guide to future investment performance and should be viewed in this way).

Fund	3 months	6 months	1 year	3 years	5 years
Nest 2040 Retirement fund	2.10%	6.30%	11.90%	24.50%	40.40%
Smart Sustainable Growth Fund	4.02%	7.57%	15.06%	31.92%	44.06%

Past investment performance figures provided by Trustnet and Mobius Life 25.02.25

Amanda Winslade, RIBA’s business manager says: “RIBA Pension Solution is so simple for practices to administer. If you have an online account, you upload your monthly information, as you would do with a NEST Pension. But with ours, you just get that extra support. So if you ever have a problem, you can just speak to the team at RIBA and we will sort it out.”

There is also plenty of communication with new members joining the scheme, including ‘welcome emails’ with account details and where to go to get help.

“Members who are currently enrolled in NEST would have had very limited information as an employee. When their employer joins our scheme, they get sent all kinds of information about managing their account and then emails throughout the year.

“We understand that architectural practices run tight ships and rarely have time to run a pension scheme. Our offer makes it as easy – and of course as beneficial­ to them and their staff as possible.”

Corpad Employee Benefits Limited is an independent financial advice team that is always on hand to assist members with any query and can provide regular proactive advice on a one-to-one basis throughout your career as well as at the retirement stage.

Corpad also provides help to practices by offering advice on the full range of employee benefit options, sourcing the best terms for any additional arrangements, and offering a full range of services to individuals. As a benefit to RIBA Members, quotes can be provided with no obligation.

If you're unsure about your pension investment strategy or would like to seek guidance on alternative options, contact business@riba.org and we can put you in touch with a Financial Advisor at Corpad.

Find out more about our RIBA Pension Solution for further information.

RIBA does not provide financial advice. We provide support to practices and factual information on the Smart Pension auto-enrolment qualifying scheme. If you require advice, we suggest you engage with an independent financial advisor, such as Corpad.