The pensions industry has expressed its disappointment at the news of a potential delay to the second phase of the government's Pension Review.

Pensions Minister, Emma Reynolds, previously suggested that the pensions industry “won’t have too long to wait” for the second phase of the review, acknowledging that there is a lot of industry interest in this phase, which is set to focus on adequacy.

However, reports have since emerged that the second phase of the review could be delayed, with a government spokesperson since confirming that it will set out more details on the second phase "in due course".

A government spokesperson stated: “Creating wealth and driving growth is at the heart of our plan for change.

"We are determined to ensure that tomorrow’s pensioners are supported, which is why the government announced the landmark two-stage Pensions Review days after coming into office and why the Pension Schemes Bill was in the King’s Speech.

“The interim report of the first phase was published at the Mansion House event on 14 November and the final report will be published in the spring. Government will set out more details on the second phase in due course.”

LangCat director of public affairs, Tom McPhail, suggested that news of the delay is "not a great surprise", given the government'srecent Budget announcements on the minimum wage and National Insurance.

Nevertheless, he warned that it will be met with "widespread disappointment" across the financial services industry and associated public policy stakeholders.

In particular, industry experts raised concerns that savers have to wait even longer for auto-enrolment reforms, as LCP partner, David Fairs, warned that this might well mean a "substantial delay" in the review of adequacy and the implementation of the 2017 changes, which the previous government committed to introducing in the mid-2020s.

Indeed, McPhail warned that the success of AE is being "eroded by the ongoing failure of successive governments to develop the workplace pension system which was created in the early 2010s".

“The retirement needs of millions of workers, both employed and self-employed are not being met by the current system," he continued.

“There are a number of critical issues which need to be addressed. Participation rates, particularly among the self-employed are too low; savings rates are not high enough across the majority of the population; the cost of state pension is escalating, yet it is barely adequate for many lower income pensioners; the savings system fails to dovetail in any meaningful way with housing or social care.

“What people need to know is whether, taking into account all possible sources of income, will they have enough to support themselves in later life?"

Hargreaves Lansdown head of retirement analysis, Helen Morrissey, also expressed disappointment at the news, arguing that the issue of adequacy is "vital", and a discussion that needs to happen sooner rather than later.

"We recognise that employers and households are under strain, but this review is just the first step and should set out a long-term timetable to boost savings," she continued.

"Ultimately people need confidence in the pension system and to know that they are putting enough way to see them through retirement. Without this, we risk people getting to retirement and finding out too late that they have nowhere near enough saved.

"It is to be hoped that the delay to this important work is only temporary – we can’t keep kicking the can down the road.”

However, Altus Consulting head of retirement strategy, Jon Dean, said that "it looks like it could be another parliament before we see any action to improve future workplace pension contribution rates”.

Hymans Robertson head of pension policy innovation, Calum Cooper, also suggested that, given the lack of timescale from the government, this delay could add "months and years" to the formation and implementation of decisions.

And whilst he acknowledged the government's concerns about the impact of the review on businesses, he argued that the second phase "could start tomorrow with any impact delayed until a future date".

"A prolonged, open-ended delay will be damaging for industry confidence in the ability for real change to take place. More importantly it defers better retirement prospects for millions of people," he continued.

“There should be nothing to fear from undertaking a meaningful pension review to tackle the adequacy challenge."

"The positive effect of those changes would be measured in generations, so it is vital that it happens. The potential positive impact of the delay will be felt by businesses and employers in the short term."

Cooper also argued that, if the government must delay, it should take this as an "opportunity" to design an independent pensions commission, to work with industry, and across the political spectrum.

McPhail agreed, stating: "If the government isn't willing to tackle head-on the tough political choices a pensions review entails, it should appoint an independent commission to take on the hard work instead.

"A commission could build political consensus for the difficult decisions which urgently need addressing and could provide elected officials with the necessary air-cover to actually implement some of these changes.”

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