Work and pensions secretary Liz Kendall has hinted that the adequacy part of the Pensions Review could be announced next week, just before parliament’s summer recess. 

Discussing the pension schemes bill when giving evidence to the Work and Pensions Committee on Wednesday, Kendall said: “There will be more to say about pensions before the House goes into recess, in terms of some of the longer-term challenges facing today’s workers and tomorrow’s pensioners.” 

MPs will be sitting on Monday and Tuesday before breaking up for the summer. 

Kendall added: “I am very concerned about the adequacy of pensions. There is the huge benefit of auto-enrolment, but many people are still not saving, and that is a real risk for them. We will have more to say about that next week, but the Pension Schemes Bill is a really important first step to try to bring those small pension pots together, with better results for savers and better results for the UK economy.” 

Kendall said she was particularly concerned about those on low incomes, and pointed out that future pensioners are more likely to still be paying off a mortgage or rent. 

“How I see this in the broad sweep of history is that we made some massive improvements under the last Labour government in tackling pensioner poverty through pension credit and then through the Turner review. That was an amazing success of public policy, but there are new problems today. I do not accept that tomorrow’s pensioners should be poorer than today’s, but that means we have to do the long-term thinking and build the consensus that we need to give people a decent retirement,” she told the committee. 

The MP for Leicester West said while pensioner poverty is terrible for those affected, everyone will end up paying for it, “so we have to take some difficult longer-term decisions to tackle those problems”.

The news comes as the Pensions Policy Institute’s Pensions Framework suggests various pensions indicators have shown no progress over the past three years. Median real pension incomes have actually declined, it found, and said the pensions adequacy review should start as soon as possible.

Just three of 41 indicators, centring on fairness, adequacy and sustainability, have improved in the UK Pensions Framework 2025 sponsored by Aviva, while three of the indicators have weakened, meaning there has been no progress overall, the PPI found. 

Each indicator contains quantitative and qualitative metrics that are used in combination to assign a score out of six. This is used to classify the extent to which outcomes are providing support for their system objective.

Among others, the PPI found that since 2020-21 there has been a reduction in net retirement incomes amid cost of living pressures, so much so that 2022-23 incomes were at around the same level as 2017-18 incomes in real terms. 

Priya Khambhaita, head of policy research and lead author, therefore called for policy action.

“A pensions adequacy review cannot come soon enough,” she said. “Performance in the pensions system has stalled since 2022, and key objectives – adequacy and fairness –continue to be weak. The second phase of the pensions review must consider more flexible structures that support adequacy, while avoiding adverse impacts on different generations and underpensioned groups.” 

The government’s reform agenda is focused on improving investment returns and stimulating economic growth, she noted.

“However, savers can only benefit from investment performance if they save early and consistently. To prevent ongoing missed opportunities, the focus must now shift toward adequacy,” Khambhaita argued. 

Managing director of wealth and advice at Aviva, Michele Golunska, said: “With major policy changes on the horizon through the pension schemes bill, the industry has a unique opportunity to get ready for the future and to ensure the system works for every generation.”

The PPI highlighted “persistent disparities between different types of pensioner households”.

Previous years had shown stronger income growth for some groups such as single women pensioners, but “this year’s data indicates that earlier signs of convergence, meaning a narrowing of income gaps between higher and lower-income pensioner groups, have stalled”, according to the PPI. This suggests inequality in retirement incomes are persisting or even widening.

The other indicators that have worsened are employment rates and longevity and population ageing. 

The PPI said the proportion of adult life spent in work has remained steady while life expectancy has edged upwards, meaning that today’s workers must save more during their working years to achieve the same retirement outcomes. 

Following the pandemic, healthy life expectancy has fallen, while economic inactivity and population ageing are going up, with the PPI saying this signals a risk to pension system sustainability.

The indicators that improved are home ownership, fiscal sustainability and scheme sustainability.

The researchers found that UK pensioners continue to have the highest levels of home ownership, while ownership rates among working-age individuals remain lower. They say housing affordability has improved since the Covid-19 pandemic, returning to levels similar to those seen about a decade ago. 

Fiscal sustainability is higher because UK public spending on state pensions and other pensioner benefits has risen at a slower rate than the total received in national insurance contributions since 2015-16. The PPI said trends in spending in relation to NICs and gross domestic product “suggest that measures designed to improve sustainability are beginning to take effect”, noting that its indicator is measured differently to the Office for Budget Responsibility’s latest assessment on fiscal risks and sustainability. 

Less surprisingly, scheme sustainability has strengthened as schemes are well funded,  and many DB schemes are in surplus, while auto-enrolment has boosted the scale of DC schemes.