State Street has been appointed as custodian to what is expected to become one of the UK's largest pension schemes, in a lucrative deal that will come as a boost to the group a week after it settled a long-running dispute with a US public-sector fund.

The Boston-based custodian has been brought in by the National Employment Savings Trust, the scheme being backed by the UK Government to ensure every worker in the country has a retirement provision. Nest is expected to start in 2012 and is projected to be worth over £200bn over the next few decades.