Nest is now able to expand the range of retirement options offered to its 14 million members, allowing it to offer flexi-access for the first time, following regulatory changes.
The legislation allowing the Government to amend Nest’s order has now come into force. This order previously restricted the range of retirement options it could offer savers.
It will now be able to offer the same retirement choices as other pension schemes ensuring it can provide default retirement income solutions, which will be required under the Pension Schemes Act.
Nest describes the removal of this order as a major milestone allowing it to expand its retirement offering. It has already announced a partnership with Rothesay to launch new lifetime income option for members in retirement, which will combine a bulk annuity with a managed investment approach.
This order was put in place when Nest was initially set up in 2012, and part-subsided by the public purse, to ensure even the smallest employers had access to an auto-enrolment provider.
Offering flexi-access drawdown will enable Nest savers to take tax-free cash up front and then drawn an income from their pension, rather than being limited to lump-sum withdrawals or purchasing an annuity.
Nest Pensions chief customer officer Gavin Perera-Betts says: “This Order change is a significant step forward for Nest and, more importantly, for our members. We believe it is important our members can access the same retirement choices as savers in other pension schemes.
“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.”
Torsten Bell, Minister for Pensions says: “For too long too many people have reached retirement without the support they need to make the most of their hard-earned savings. 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 will provide further updates on the development and timing of its flexi-access drawdown offering, including how it will work for members as part of wider guided retirement solutions.
