Whitehall has claimed UK pension funds will be able to invest in high-growth tech companies before the next tax year.

Current regulations prevent pension funds from doing so, with chancellor Rishi Sunak examining how to remove the 12 or 13 barriers to funding by March 2023 at the latest.

The minister for science, research and innovation, George Freeman, told The Times: “By the end of this, hopefully calendar, certainly financial year, those measures should all have been tackled. We will then be in a position to start to properly connect the City with our science or technology base. That’s a huge moment.”

The British Business Bank estimates assets under management from workplace pension schemes will reach £1 trillion by 2029. Funnelling some of that investment into venture capital funds would offer an alternative to capital from overseas investors.

Overseas investors made up 75 per cent of the total invested in UK tech start-ups in 2021, with the majority coming from the US.

That contributed to the UK tech sector reaching record levels in 2021 with £8.2bn invested, double 2020’s figure.

However, fewer tech start-ups have been listing in London and politicians see greater funding from UK-based funds as a solution to encourage more to do so.

Last week, Labour’s shadow chancellor Rachel Reeves expressed concern at the number of start-ups listing in the UK and the difficulties they face scaling up.

Among other plans outlined in the new digital strategy report published by the Department for Digital, Culture, Media and Sport earlier this month, Freeman revealed he is also to encourage City investors to bolster their tech analyst teams, so the risks of investing on young tech start-ups is better understood.

“There aren’t that many science, technology and innovation analysts in the City of London fund management scene,” he added to The Times. “We need to nurture a new generation and come and show them the scale of what’s coming down the pipe.”