The Chancellor, a former shadow pensions minister, has labelled her proposals to shake-up the pensions industry a “big bang of reforms to unlock growth, boost investment and deliver savings for pensioners”.

She recently met with the heads of large pension providers like M&G, Legal & General, Phoenix and Aviva to thrash out the issue. Royal London supports the review, despite Mr O’Dwyer’s note of caution.

Ms Reeves last week launched a review to consider whether the UK’s £360bn of local council pensions should be combined into one single fund. 

There are more than 80 individual taxpayer-backed pension funds across the UK and consolidating them into a single pot could be more cost effective.

Defined contribution (DC) pensions, the main type of workplace pension for millions, have boomed after the introduction of compulsory pensions known as auto-enrolment.

The value of DC schemes is expected to swell to around £800bn by 2030 and Ms Reeves’ review will explore ways to increase their investment into useful economic areas.