Announced on Friday (August 16), the initial phase also aims to tackle fragmentation and inefficiency in the local government pension scheme through consolidation and governance.

Experts have urged the government to keep the interests of savers at the forefront.

In addition, it 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 and encourage further pension investment into UK assets to boost growth across the country.

Chancellor Rachel Reeves has appointed pensions minister Emma Reynolds to lead the review, which could unlock the investment potential of the £360bn local government pension scheme in England and Wales.

The review aims to boost returns for pension savers and look at the role of pension funds in capital and financial markets to boost returns and UK growth.

Tom Selby, director of public policy at AJ Bell, said it was vital the interests of savers were not sidelined.

He said: “Successive governments have made dangerous claims that a shift to riskier investments will deliver larger pension pots for people, despite the inherent uncertainty that exists in this area, particularly when considering investment returns over decades.

“It is, of course, entirely possible that investing more in the UK will yield better returns and bigger pension pots but it could also go the other way.

“Trustees and those responsible for looking after members’ interests therefore have a crucial role to play in ensuring investment strategies are designed with the aim of delivering good outcomes for those who will ultimately rely on those pensions in retirement. ”

He added there is a risk the goals of pension savers could be sacrifices to deliver the government’s economic goals.

Patrick Luthi, chief executive of NOW:Pensions, said there was an urgent need for a strategic and consensus-driven approach to tackling some of the problems in the UK pension system.

“It is crucial that the outcomes from this review provide long-term solutions which tackle the key challenges that the pension system is facing now and also those which will impact over the next decade, including adequacy,” he said.

“We believe this involves the collaborative development of a roadmap for the future of automatic enrolment, a strategic approach to policy development on wider specific policy issues (including small pots, decumulation, and value for money) and a number of key safeguards to help steer policy development and delivery.

“This approach will help to ensure members remain at the heart of policy solutions and that businesses also get the clarity they are looking for.”

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

Read more @ftadviser