Rachel Reeves will tear up pension at work rules as part of a wider shake-up which the chancellor claims will unlock up to £80bn of investment.

In her inaugural speech at Mansion House on Thursday, Ms Reeves will outline her plans create UK ‘mega funds’ led by both local government and the private sector.

By bringing the pots together, Ms Reeves hopes it will give them the firepower to invest in a wider range of UK and overseas assets, including infrastructure and high-growth companies.

The speech will also reveal plans to condense the Local Government Pension Scheme (LGPS), currently a collection of 86 separate funds worth £360 billion, into fewer larger pots.

Bank of England and City regulator they will also receive new targets to help boost economic growth.

Andrew Bailey, the Bank’s governor, will also address the annual bankers’ banquet, where he will set out the challenges of boosting Britain’s anemic growth rate.

Separately, new mayor Alastair King will call for a shake-up of the UK’s ISA market, including cash and shares, as he urges the government to give savers more options to invest in high-growth companies before they go public. .

Ms Reeves hailed what was “the biggest set of pensions reforms in decades”, claiming it would “unlock tens of billions of pounds of business and infrastructure investment, boost people’s retirement savings and boost economic growth , so that we can make every part of Britain better.”

However, companies have warned that Ms Reeves’ £40bn tax raid is already squeezing their “investment space” and eroding the message that Britain is open for business.

Workplace pensions are currently regulated by both the Financial Conduct Authority (FCA) and the Pensions Regulation Authority (TPR).

While the existing framework has already led to large-scale consolidation in so-called trust-based schemes, including the formation of around three dozen master trusts that manage the savings of millions of workers, consolidation in the larger group personal pension market ( GPP) is much Louder.

This is because, under FCA rules, pots cannot be easily combined without “individual saver consent”, which the regulator previously warned was “expensive to obtain and unlikely to be fully achievable given typical saver deactivation’.

The Treasury wants to make it easier for these “contract-based” schemes, which account for around £300bn of the half-trillion in defined contribution pension funds, to make “bulk transfers” which will lead to faster pension consolidation in the fast-growing workplace. .

However, companies have warned Ms Reeves not to increase the burden on businesses after being hit by a £25bn jobs tax in the Budget.

Louise Hellem, chief economist at the Confederation of British Industry (CBI), said: “Unlocking investment also requires competitive and profitable businesses. As the Budget heaps extra costs on businesses and squeezes their investment space, the Government must work hard to restore confidence in the UK as a place where businesses and communities can succeed. Pension schemes will want to operate in a thriving UK economy.”

The Lord Mayor will use his speech to urge the government to expand investment opportunities for British savers.

“We need to develop additional mechanisms for the UK pensions industry to invest in both pre-IPO and IPO funds – reinvigorating our capital markets and combating the current view of many European companies that they must turn to the US for funding,” he will say.

The UK currently has the second largest pension asset fund in the world. However, the current fragmented system of thousands of small vessels has led to a number of warnings that British savers are missing out on higher profits.

Previous analysis by the government’s actuary estimated that LGPS could reach around £950 billion in assets in 2040, with the previous government suggesting this would result in “fewer pools averaging £200 billion of pounds in the future’.

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