Millions of people who opted out of the state second pension will be given greater freedom to invest for their retirement under a change in the law that comes into force today.

Around 8 million people have opted out of the scheme in return for national insurance rebates, which until now had to be redirected into protected rights funds held within personal pension schemes. There is between £70bn and £100bn held in protected rights funds.

Today's rule changes will allow people to transfer protected rights into self-invested personal pensions (Sipps), where they will have greater control over where their pensions are invested.

Sipps offer access to a wide variety of assets such as unit trusts, equities and commercial property.

The range of investments available through a Sipp could leave pension savings open to a greater level of risk than conventional pension schemes, and are generally deemed to be suitable for people with a reasonably sophisticated understanding of investments.

But financial advisers Killik & Co have urged pensions savers to review their options to see whether they could benefit from transferring their funds.

"A lot of people are worried that moving investments in the current market conditions might not be a good idea," said Hannah Edwards of Killik & Co. "But leaving your money in equity-based insurance funds might not be wise either.

"Through a Sipp you could choose to invest completely in cash, or buy into gilts."

Andrew Sykes, head of retail policy and unfair contract terms at the Financial Services Authority, advised savers to think carefully before making any changes to their pensions provisions: "We would encourage consumers to make sure they fully understand the implications of leaving the state second pension or transferring accrued protected rights into a Sipp, to make sure it is the right decision for them."