The government has shared further details on its plans for a “landmark” pensions review, confirming that the first phase of the review will focus on developing policy in four key areas.

The review, which was announced by Chancellor, Rachel Reeves, last month (July), is set to cover both defined contribution (DC) workplace schemes and the Local Government Pension Scheme (LGPS).

In its latest update, the government confirmed that the review will focus on four specific areas, including driving scale and consolidation of defined contribution workplace schemes, and tackling fragmentation and inefficiency in the LGPS through consolidation and improved governance.

In addition to this, the review will look at the structure of the pensions ecosystem and achieving a greater focus on value to deliver better outcomes for future pensioners, rather than cost, as well as plans to encourage further pension investment into UK assets to boost growth across the country.

Initial findings from the first phase of the review, focusing on investment, are expected "later this year", and ahead of the introduction of the Pension Schemes Bill.

As part of this work, the review is set to consider issues such as boosting the returns for pension savers, improving the affordability and sustainability of the LGPS in the interest of members, employers and local taxpayers, and the role of pension funds in capital and financial markets to boost returns and UK growth.

It will also consider any implications for wider government financial stability policy objectives such as with respect to the gilt market, and consider fiscal impacts, which will need to be considered in the context of the public finances.

The government said it is looking to consult widely throughout the review confirming that co-creation with industry and the LGPS will be an “essential” part of the review process, as will expertise from leading voices and think-tanks.

The second phase of the review, meanwhile, will start later this year, and will consider further steps to improve pension outcomes, including assessing retirement adequacy.

In addition to this, the government confirmed that ongoing policy development with respect to defined benefit (DB) workplace pensions schemes will remain separate from the review.

The update has been welcomed by industry experts, with Royal London director of policy, Jamie Jenkins, stating: “As widely trailed, the first phase of this review is primarily concerned with how pension assets can be invested in a way that helps grow the economy.

"However, there is a clear statement about how this must focus on the broader value delivered to savers, rather than just cost. It’s imperative that people’s retirement outcomes form the cornerstone of any proposals that emerge.”

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