Britain needs fewer and much larger funds that can diversify risks and invest in range of assets

• Rachel Reeves pledges ‘big bang’ for private pension funds

The chancellor Rachel Reeves’ announcement of a far-going review into Britain’s pension fund system has the potential to rival Gordon Brown’s creation of an independent Bank of England in economic importance.

Unbelievably, less than 2% of the £2.5tn of pension fund assets run by over 30,000 – often very small – pension funds are invested in British companies, either on the public markets or as unquoted start-ups and scale-ups. It is a disgrace, serving neither the economy nor pensioners: root and branch reform, as I argue in my new book, This Time No Mistakes, is a precondition for higher growth.