The Parliamentary Contributory Pension Fund holds less than 3 per cent of its equity investments in British shares, a figure dramatically below the 12 per cent average.

The revelation, revealed by research conducted by the Pensions Policy Institute, comes as Rachel Reeves looks to change rules to prioritise UK investment.

At the end of March, the £855.5million fund had allocated just £12.8million to domestic stocks.

Meanwhile, £462.3million sat in overseas equities, its latest annual report reveals.

The disparity has sparked accusations that MPs are undermining Rachel Reeves’s push to boost investment in London’s stock market.

Movement towards UK holdings has been minimal, with the overall portfolio allocation to domestic shares edging up from 1.4 per cent to 1.5 per cent over the past year.

Ex-Chancellor Sir Jeremy Hunt, who himself sought to direct more pension money into UK equities, argued that the parliamentary scheme ought to set an example for others.

“If governments from both parties want pension funds to invest more in the UK, then it rather makes a mockery of things if the parliamentary pension scheme does the opposite,” he said.

Meanwhile, Charles Hall, head of research at broker Peel Hunt, expressed astonishment at the figures.

“It’s extraordinary that our own MPs have even lower allocation to UK equities than the average pension fund,” he said. “It’s high time the MPs showed some leadership and backed UK companies.”

The criticism comes as pension policy has become central to the government’s economic growth strategy.

Responsibility for the fund’s asset allocation rests with trustees who include senior figures from both main parties.

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Dame Meg Hillier, the Labour MP who chairs the Treasury Select Committee, serves as a trustee alongside Dame Harriett Baldwin, her Conservative predecessor in that role.

Ministers have incorporated several provisions into forthcoming legislation designed to channel more pension capital into British assets.

The bill, expected to pass next year, includes plans to consolidate pension funds with the aim of driving greater domestic investment.

Should voluntary efforts prove insufficient, the Government has reserved legal powers to impose asset allocation targets on schemes.

These measures form part of a broader strategy that has placed pension reform at the heart of plans to stimulate economic growth.

Pensions minister Torsten Bell urged all schemes, including the parliamentary fund, to examine opportunities in UK assets.

“That is especially the case given this year has seen the FTSE hit record highs and significant momentum behind listings in London, from Magnum this week to Fermi, Prince’s Group, and Shawbrook,” he told the Financial Times on Thursday.

The Treasury launched the Mansion House Accord in May, securing voluntary pledges from 17 major pension providers to direct at least 5 per cent of their assets into UK private markets by 2030.

The arrangement remains subject to finding sufficiently attractive investments.

According to the Treasury, the pension reforms will funnel more than £billion into fast-growing British businesses and infrastructure by 2030.

It is also expected to boost individual retirement pots by nearly £30,000.