Industry experts have warned that "time is running out" to address pension adequacy issues, with the latest updates from government suggesting that phase two of the pension review will be launched "in the coming months".

The government is laying the Pension Schemes Bill in parliament today, providing further details on a number of upcoming reforms, including the value for money framework, consolidation efforts, and plans to address small pot issues.

However, LCP partner, Steve Webb, argued that whilst there are many worthy measures in the bill, the biggest omission is action to get more money flowing into pensions.

He also warned that whilst measures such as consolidating tiny pension pots are helpful tidying up measures, they do "nothing" to tackle the fundamental problem that millions "simply do not have enough money set aside for our retirement".

"The government’s own projections show that more than 12 million people are not saving enough for retirement and yet the first major pensions legislation of the new parliament does nothing to address this ‘elephant in the room’," he stated.

"The very fact that the adequacy of pension saving is not going to be considered until the second phase of the government’s pensions review shows that this issue is unfortunately on the back burner."

And any changes following the review could be a long-term piece of work, as LCP also noted that any legislation off the back of phase two of the review could take "years" to implement.

"With every passing year that this issue goes unaddressed, time is running out for people already well through their working life to have the chance for a decent retirement," Webb stated.

This was echoed by Association of British Insurers (ABI) director of policy, long-term savings, Yvonne Braun, who argued that whilst this wide-ranging Bill is set to usher in the largest-scale pension reforms since auto-enrolment, work on contribution levels is still needed at pace.

"We also urgently need to tackle the level of pension contributions which are too low to create an adequate retirement income for many," she said. "We urge the government to set out the details of its adequacy review as soon as possible."

Association of Consulting Actuaries (ACA) chair, Stewart Hastie, also emphasised that "this is not job done" for the government.

"Before the end of the year, we hope to see government action to mitigate the unintended implications of the Virgin Media case and make a good start on reviewing the long term steps needed to tackle the UK’s retirement adequacy challenges," he stated.

Pensions Minister, Torsten Bell, previously suggested that he would provide an update on the timings around phase two of the review, which is expected to focus on adequacy, in the final Pension Investment Review report.

However, the final Pension Investment Review report has since been published with no mention of the next steps for phase two of the review.

Asked by Pensions Age at the time whether he could provide any further updates, the minister said that he was unable to confirm the exact timings, but confirmed that he would be sharing updates "in due course".

Chancellor, Rachel Reeves, has since also wrote to the Work and Pensions Committee (WPC) confirming that the government plans to launch the second phase of the Pension Review in the "coming months", while the reviewers, scope, and terms of reference will be shared "in due course".

Bell has repeatedly stressed that the “industry would not be waiting forever” for phase two, again indicating that reports that have said it will be expected in the far future were “garbage”.

However, addressing the WPC yesterday (4 June), Bell confirmed that his short-term focus is on pension investments, arguing that given the role of the state in encouraging pension saving rates, "it's on all of us to make sure [savers] get the best bang for every pound they are saving".

"Why do I say we need bigger better pension funds, because that is one of the enablers of higher returns for savers," he stated.

And existing auto-enrolment reforms are also seemingly on hold as the industry awaits the launch of phase two, as when previously asked whether the government would be looking to take forward the Private Members Bill to extend auto-enrolment to lower earners and younger workers, which gained Royal Asset after passing through parliament in 2023, Bell stated: "I want to consider wider questions in the round about the future of the pension system, and that's what phase two is going to be doing."

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