The plans involve using the UK’s various pensions schemes, worth over £2.5 trillion, to boost investment in start-up companies.

The reforms will also unlock up to £75 billion of additional investment from defined contribution and local government pensions, supporting the Prime Minister’s priority of growing the economy, and delivering tangible benefits to pensions savers.

In his speech, Jeremy Hunt said, ‘Today I am pleased to announce that the Lord Mayor and I joined the CEOs of many of our largest DC pension schemes – namely Aviva, Scottish Widows, L&G, Aegon, Phoenix, Nest, Smart Pension, M&G & Mercer – for the formal signing of the “Mansion House Compact”.

“The Compact – which is a great personal triumph for the Lord Mayor - commits these DC funds, which represent around two-thirds of the UK’s entire DC workplace market, to the objective of allocating at least 5% of their default funds to unlisted equities by 2030.

“If the rest of the UK’s DC market follows suit, this could unlock up to £50 billion of investment into high growth companies by that time.”

Nausicaa Delfas, TPR’s chief executive, said: “These reforms support our ambition for pension savers to be in large, well-run schemes that deliver good outcomes at every stage of their retirement journey.

“They will drive a long-term focus on value, encouraging schemes to invest in the full range of asset classes to deliver higher returns for savers.

“The value for money framework will shine a light on schemes that consistently underperform, and new powers will allow us to enforce consolidation where necessary.

“Similarly, the expansion of collective defined contribution schemes (CDCs) and introduction of a permanent regime for pensions superfunds all represent a welcome boost for innovation in savers’ interests.”