The UK needs to smash the “tiny jam jars” of pension funds and merge them into a “war chest of £180bn" to better invest in Britain’s infrastructure, according to Boris Johnson.

Writing for The Telegraph, Johnson said among the 39,000 public-sector pension funds in the UK, “the waste is extraordinary” and the country is missing a “huge opportunity, and one that is being exploited by more sensible governments around the world.”

Commenting on the cost of such a large amount of funds, Johnson said: “Think of all those advisers and investment managers taking their fees – their little jaws wrapped blissfully around the giant polymammous udder of the state. Think of the duplication.”

The Mayor of London said the Dutch, the Canadians and the people of Singapore are all examples of people who are using pension-fund cash to instead invest “tens of billions in infrastructure and housing, some of it in London”.

“[They] have realised that it is mad to keep their pension funds divided into tens of thousands of relatively tiny jam jars of cash. They have smashed the jam jars, pooled the pension funds – and created gigantic sovereign wealth funds which they are using to invest in high-yield assets,” he added.

“If we amalgamated our local authority pension funds, we would have a war chest of £180 billion; and if we added in all the public-sector pension funds, we would be talking hundreds of billions – and suddenly we would be able to direct those vast UK assets to the support of projects that are both socially useful and vital for the economy.”

Johnson said these types of investments would be attractive because “they typically have a much higher yield of around 7 or 8 per cent – compared with the 2 or 3 per cent currently achieved by pension fund managers in bonds or gilts”.

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