The government has been urged to launch the second phase of its pension review "sooner rather than later", amid concerns that, despite the success of auto-enrolment (AE), many are still not saving enough, with some at risk of being "left behind" completely.

The government previously confirmed that it had postponed the second phase of the ongoing pension review, which is expected to look into the adequacy of UK pensions.

Pensions Minister, Torsten Bell, later announced that the government would be looking to share further details on the timing and scope of phase two of the review as part of its final report on the Pension Investment Review, which is set to be finalised in “the coming weeks”.

Given this, many in the industry had been hopeful that further updates on the review could be seen in the Chancellor's Spring Statement. But no mention of pensions was made as part of this.

There was some updates this week, however, as Bell responded to a parliamentary question on AE, arguing that AE has "succeeded in transforming retirement saving with over 11 million employees having been automatically enrolled into a workplace pension since 2012".

The impact of AE was also evident in the latest government figures, which showed that pension scheme participation among working-age people has increased from 37 per cent in 2013-14, to 55 per cent in 2023-24.

Among employees it has grown from 53 per cent to 79 per cent.

However, Bell admitted that "we need to do even more to build on the success of AE in getting people in to saving by ensuring security in retirement for all…".

"We also acknowledge the importance of addressing the broader question of adequacy and how to build on the success of AE to ensure that people are saving enough for retirement," he continued.

"Therefore, the second phase of the review will in due course look at further steps to improve pension outcomes, and pension adequacy for all.”

Society of Pension Professionals (SPP) president, Sophia Singleton, agreed that a "thorough" pensions adequacy review from the government would be a "useful starting point" to consider all of this, emphasising however, that this is needed "sooner rather than later".

“Automatic enrolment has been hugely successful in getting many more people to save but not so successful in getting them to save enough," she continued.

"However, rather than simply looking at a compulsory increase in contributions, we need to define adequacy, recognise that one size does not necessarily fit all and that we may need a more dynamic solution than a simple minimum flat contribution rate.

"There are various other actions that policymakers, industry and savers can take, from supporting an older workforce and helping disenfranchised groups to improving trust and engagement."

Despite the increase in pension participation, the recent government figures have also prompted renewed concern for savers who are excluded from AE, as pension participation among the self-employed remained low at 19 per cent.

Given this, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, warned that the self-employed could be at risk of being "left behind".

Rather than AE changes, however, Morrissey suggested that a lifetime ISA could play an important role in helping the self-employed prepare for retirement, although she suggested that further reform in this area could also prove helpful.

"Reducing the early exit penalty from 25 per cent to 20 per cent would remove the situation where someone accessing their money not only loses their bonus but also a chunk of their own saving," she stated.

"Enabling people to open and contribute to a LISA up until the age of 55 (currently the over 40s can’t open a LISA) would be especially useful for those who become self-employed later in life.

"Self-employed people earning higher and additional rate tax will continue to favour the pension because of the extra tax relief, but these changes could still help many people."

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