Assets under management in mutual funds will reach a record high of £880 billion by 2014, up 8.9% on £808 billion in 2013, according to a report from thinktank the EY Item Club.

The end of compulsory annuitisation, announced in the 2014 Budget, will further stimulate the market, according to the report, and if one quarter of the current £12 billion market were to flow into investment products, this would add an extra £3 billion in assets.