Reforms to enable employers to extract surpluses from traditional pension schemes will release only £8.4 billion over ten years, a small fraction of the £160 billion that ministers have previously suggested could be available.

A newly published impact assessment report from the Department for Work and Pensions estimates that unlocked surpluses would amount to £957 million a year and could be as little as £153 million a year.

That compared with £160 billion of surpluses that Sir Keir Starmer and Rachel Reeves, the chancellor, announced in January were trapped and could potentially be unlocked and used by employers for fresh investment or to pay higher pensions or wages.

Some experts believe even the £8.4 billion figure is overstating the case because pension trustees are likely to be very cautious in seeing cash removed, preferring to preserve buffers in case of adverse market movements in future.

Employers meanwhile are mostly keener to rid themselves of legacy schemes permanently by using surpluses to pay for insurers to take them off their hands in so-called buyout deals, rather than running them on and so exposing themselves to continuing risks.

John Ralfe, an independent consultant, wrote in a research note for a client, Pension Insurance Corporation: “Forget about £160 billion of pension surpluses just waiting to be paid out ‘to drive growth and boost working people’s pension pots’. The DWP figures estimate just a fraction of this, mainly because most companies want a full buyout with an insurance company.”

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The DWP estimated that of the £8.4 billion released over the next decade, around £4.2 billion would go to employers and £4.2 billion would be paid out in additional pensions to scheme members.

Easing restrictions to enable employers to access surpluses in schemes was one of the key reforms in the Pension Schemes Bill, tabled this week and hailed by ministers as a key step towards boosting UK growth.

Some pension experts expressed scepticism that much of the released cash would be used for additional capital spending. Neither of the two blue-chip companies already in the process of accessing surpluses, Schroders and Aberdeen, is proposing to use the liberated cash for extra investment or to boost pensions

Some pension fund members are concerned that irresponsible employers could extract too much cash, leaving them with shortfalls in the event of adverse markets in future, although the government insists safeguards will be in place.

Rising bond yields have dramatically improved the health of most of the UK’s 5,000 defined benefit schemes in recent years, even those in serious difficulties in the past. The 10,000-member Littlewoods scheme, which was once regarded as in peril with a £400 million shortfall, this week disclosed it was paying £16 million back to the shareholders of its sponsor company Very Group after securing all benefits though buyout deals.

The bill also contains measures to encourage defined contribution schemes to build scale by merging and to invest more in private assets, including in the UK. The DWP report estimated that 20 million people would benefit, while businesses would be £34 million a year better off.

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A Downing Street statement said in January: “Approximately 75 per cent of [defined benefit pension] schemes are currently in surplus, worth £160 billion, but restrictions have meant that businesses have struggled to invest them.”

Defined benefit schemes today have around nine million members and £1.2 trillion of assets and are mostly closed to new accrual. The great majority of private sector workers today are in non-guaranteed defined contribution schemes.

A government spokesman said: “Our proposals will unlock funds to boost the economy, remove barriers to growth and ensure working people and businesses are able to benefit from the opportunity these assets bring.”