Rachel Reeves has told City chiefs she plans to create pension “megafunds” that will “power growth” in the economy and reward British savers.In her first Mansion House speech as Chancellor, Ms Reeves announced plans for the megafunds which she said could bring in £80 billion to invest in businesses and infrastructure.

Chancellor Rachel Reeves wants to copy the way Canada and Australia group their pension funds together in a bid to increase investment. The government believes this could bring in an extra £80bn of funding.

UK public sector pension funds are not big enough to generate good returns for British savers, Chancellor Rachel Reeves has told the BBC. Her comments come as the government reveals plans to merge the UK's local government pension scheme, a group of funds which together manage £354bn in investments, into a handful of "pension megafunds".

Chancellor of the Exchequer Rachel Reeves said the UK will introduce legislation next year to pool £1.3 trillion ($1.7 trillion) of pension savings into a series of “megafunds,” as the new Labour government tries to deliver on its pledge to boost private investment and economic growth.

Chancellor Rachel Reeves is to set out what she is calling the "biggest pension reform in decades" in an attempt to boost growth. The government wants to merge the UK's 86 council pension schemes into a handful of "pension megafunds".