The pensions adequacy review, expected to be launched on Monday, must not be “nobbled by the Treasury from day one”, but “free to come up with its own recommendations – even if these cost money”, former Pensions Minister and LCP partner, Steve Webb, has warned.

Webb has set out three ‘tests’ on which the review should be judged. The first is ensuring that the review has a ‘free hand’, including recommending reforms that will cost the government money.

“Most changes to the system, including getting people to save more, will have a cost implication, such as through higher costs of tax relief. But a proper review can only do its job if it is allowed to consider all options and has not been hamstrung by the Treasury from the start. In particular, it needs to be able to set out a timetable for improving contributions over a realistic period,” Webb explained.

The second is for the review to look at the whole pensions system, as “with the state pension representing such a large part of many people’s retirement income, and particularly so for many women, a proper review of the adequacy of pension saving needs to look at pension income in the round, and not just private pensions”, Webb said.

Finally, he recommended for the review to look at the wider issues around short-term and long-term saving in an integrated way.

Describing the review as a “once-in-a-generation chance to tackle the growing crisis of inadequate pension saving in the UK”, Webb said that for it to be effective, it “needs to take into account the whole pension system, including the state pension, which is so vital to many”.

According to Webb, it also needs to think about broader savings, including short-term cash saving and saving for a house, as “one of the worst outcomes for today’s working age population would be to end up having to fund a rent out of a meagre pension pot, and this review is the chance to look at that issue as well”, he added.

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