Pension reforms announced by Chancellor Rachel Reeves must unlock growth, according to the British Chambers of Commerce (BCC).

Pension megafunds will be created as part of the biggest set of pension reforms in decades. The government says this will unlock billions of pounds of investment in exciting new businesses and infrastructure and local projects.

The reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion in investment in exciting new businesses and critical infrastructure while boosting defined contribution savers' pension pots.

Shevaun Haviland, Director General at the BCC, said:

'Increased investment in the UK economy is crucial if businesses are to deliver the growth we all want to see.

'And with firms facing into a wall of fresh costs after a tough Budget, it is important that the Chancellor looks at the options to unlock more funding.

'UK pensions can be a crucial component in doing that. They can generate billions for investment in infrastructure projects and the businesses of the future.'