Chancellor Jeremy Hunt has announced a series of pension reforms that he said could increase the size of the average earner's pension pot by £1,000 a year in retirement.

Hunt made the announcement on Monday night to unveil the ‘Mansion House Reforms', which aim to unlock up to £75 billion for high growth businesses by the end of the decade.

Measures include a voluntary compact among the country's biggest pension funds to invest 5% of their assets in startups and private equity to potentially unlock £50bn in investment by 2030.

The UK has the largest pension market in Europe, worth over £2.5 trillion, but UK institutional investors are not investing as much in high-growth companies as their international counterparts, hence the reforms.

Hunt said: "British pensioners should benefit from British business success. By unlocking investment, we will boost retirement income by over £1,000 a year for a typical earner over the course of their career.

"This also means more investment in our most promising companies, driving growth in the UK."

Shevaun Haviland, director general at the British Chambers of Commerce, welcomed the reforms and the "better funding environment" they promised to create.

However, with SMEs accounting for 80% of the UK economy, "we can't forget about channelling investment into our local economies and supply chains," Haviland warned.

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