A revival of the Pension Commission has long been touted as the solution to many of the challenges the retirement market faces.

The last commission is credited with getting Britain saving into a pension through auto-enrolment – the bar has been set high and there is a lot to do.

The Department for Work and Pensions has noted that 45% of working age people are not saving into a pension at all, so at the top of the agenda will sit issues such as whether auto-enrolment contributions need to rise – as well as how to get groups such as the self-employed to save more for retirement.

These will prove tricky to tackle so the new commission has its work cut out.

1. Boosting pension contributions

The issue of how, when and if to boost auto-enrolment minimums has long been on the table. However, it’s not as simple as hiking rates across the board – the issue of pension adequacy means different things to different people.

We don’t want to be in a position where lower earners see their contributions hiked to the extent that they struggle in the here and now. Similarly, we don’t want higher earners to save at minimum levels and receive a nasty shock when they get to retirement and realise their pension will not sustain the lifestyle they have been used to.

Hargreaves Lansdown (HL) has analysed what people should be aiming for, using the HL Savings and Resilience Barometer.

The most sensible approach is to use the living pension as a minimum income underpin – and layer target replacement rates over this, which could state, for example, that someone might aim for an income of two-thirds of their pre-retirement earnings.

The commission will need to assess what needs to be done to incentivise people to contribute more than minimum into their pension. · SolStock via Getty Images

State pension and minimum auto-enrolment contributions should be set at a level that helps lower earners hit their target replacement rate and higher earners would be encouraged to contribute over and above these minimums to hit theirs.

This analysis shows that the lowest earners are already reaching a decent replacement rate in retirement: middle to higher earners are the ones who need to save more to maintain their lifestyles.

Here, the commission will need to assess what needs to be done to incentivise people to contribute more than these minimums where needed to build their retirement resilience. Engaging people with their savings will be the key to driving higher rates.

Read more: How much money do you need to retire?

As we run into the budget, any discussion around reform of pension tax relief needs to be treated with care. Tinkering with these incentives could lead to people putting less away for their future which could cost the state more in the long run. Stability in pensions tax is essential if people are going to be confident that the money they put away today, will be there for them decades into the future.