Boris Johnson has called on British pension funds to plough more retirement savers’ cash into UK assets to spark an “investment big bang” to support the economic recovery.

In a letter to the investment industry, the prime minister and chancellor Rishi Sunak said UK institutional investors needed to “seize the moment” and use their “hundreds of billions of pounds” to back assets that often carry a longer term payback such as infrastructure, which includes bridges, roads and wind farms.

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They argue that UK assets are being overlooked by domestic investors. “UK institutional investors are under-represented in owning UK assets,” the letter says. “Over 80 per cent of UK defined contribution pension funds’ investments are in mostly listed securities, which represent only 20 per cent of the UK’s assets.”

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Some of the world’s largest pension funds, including from Canada and Australia, have been active in backing infrastructure projects, including in the UK, which officials say has provided a long-term income for their investors.

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Ministers also want millions of pension savers to be better able to support high-growth UK tech companies, which often miss out on institutional investment given a nervousness among fund managers to support riskier, lossmaking start-ups.

Pension fund trustees have a duty to act in the best interests of their members with the higher fees and charges associated with non-standard investments, such as infrastructure and private equity, seen as a barrier to steering cash into these sectors.

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