Chancellor Jeremy Hunt will today promise “evolutionary not revolutionary” pension reforms to unlock capital for high-growth businesses and boost outcomes for pension savers.

He will use today’s annual Mansion House speech later today to welcome an agreement with leading pensions firms to put 5% of their investments, up to £50bn, into high-growth businesses.

Aviva, Legal & General and Phoenix Group are among those understood to be taking part.

Pensions firms welcomed that the move will not be made mandatory.

In his speech Mr Hunt is expected to announce a wide-ranging package of measures that build on the Edinburgh Reforms he announced in December last year.

The Chancellor will pledge that changes will put the needs of pension savers “first and foremost.”

He is expected to say: “It will be an evolutionary not revolutionary change to our pensions market.”

Mr Hunt will pledge to prioritise a “strong and diversified” gilt market, meaning he will not force firms to favour riskier investments over the low-risk ones offered by the Government.

He will also set out a “golden rule” of never making changes that “compromise” the sector with what he is calling the Mansion House Reforms.

Nigel Peaple, policy director at the Pensions and Lifetime Savings Association, said: “The Chancellor has confirmed that the pensions sector will keep their freedom to invest in the interest of the individuals whose savings they manage.

“This is the key priority for the pensions sector and we welcome that Mr Hunt has listened to our views on this important matter.

“After the gilt market turmoil of last September, it is reassuring that the Government is committed to a strong and diverse gilt market and that, in consequence, it is seeking evolution not revolution with regard to pensions.

“We look forward to continuing our dialogue with the Government on their proposed pensions reforms, seeking always to achieve outcomes that mean a ‘win, win, win’ for savers, pension schemes and the UK.”

Chris Cummings, chief executive of fund manager trade body the Investment Association, said: "With the right regulatory framework, pension schemes will be able to invest productively and sustainably, unlocking further investment for innovative growth companies, and improving returns for savers by broadening investment options.”

Hannah Gurga, director general of the ABI, said: “We share the Government's ambition to make pension money work as hard as possible to deliver better returns for savers and the UK economy. A long-term strategy with savers at its heart and working with the sector are key to delivering on this ambition.”