Legislation enabling Nest Pensions to offer flexi-access drawdown and related retirement and death benefit options to its more than 14 million members has now come into force.

The change, made through an amendment to Nest’s order, will allow the master trust to expand its retirement offering and provide members with access to the same retirement choices available in other pension schemes.

With around one in three British workers holding a Nest pension pot, the legislative change is also expected to support the government’s emerging expectations around default pension benefit solutions, as outlined in the Pension Schemes Act.

Flexi-access drawdown will enable members to take tax-free cash upfront and draw an income from their pension over time, rather than being restricted to lump-sum withdrawals or purchasing an annuity.

Nest Pensions chief customer officer, Gavin Perera-Betts, described the order change as “a significant step forward” for both the provider and its members.

“We believe it is important our members can access the same retirement choices as savers in other pension schemes,” he said.

“Our research shows many members want the flexibility to take their tax-free cash up front and then draw a sustainable income, rather than being restricted to lump-sum options.

"Offering flexi-access drawdown is an important step in building a wider set of retirement solutions that work for our diverse membership and support sustainable income in later life.

“This milestone also helps ensure Nest is well placed to meet the government’s emerging expectations on guided retirement, as set out in the Pension Schemes Act.”

Minister for Pensions, Torsten Bell, said the reforms are intended to improve support for savers approaching retirement.

“For too long, too many people have reached retirement without the support they need to make the most of their hard-earned savings,” he stated.

“The Pension Schemes Act will give a default pension to savers that actually works for them, while keeping the freedom to choose something different if they want to.

"We want retirement to feel like a reward, not a puzzle, which is why we’re making sure people get consistent, meaningful support as they turn their pension savings into a real income for later life.”

Nest said it would provide further updates on the development and timing of its flexi-access drawdown offering, including details on how the solution will operate as part of its wider guided retirement proposition.

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