A new investor-led partnership between 20 of the UK’s largest pension funds and insurers has been established to channel savings into key infrastructure and businesses in sectors including AI and fintech.
L&G has kicked off the investment drive with a £2 billion commitment by 2030, which the UK Government says will deliver around 10,000 more homes and support the creation of 24,000 jobs nationwide.
Nest, who represent a third of the UK workforce, will also provide Schroders Capital with £500 million – of which £100 million is expected to be channelled into UK investments in the coming years. In addition, Nest will invest £40 million to deliver gigabit-capable fibre broadcast to remote areas in Scotland and Norther England.
Chancellor of the Exchequer Rachel Reeves said:
“This is about getting Britain building again – bringing our savings, our investors and our regions together to deliver the homes, infrastructure and industries that will drive growth and create good jobs in every corner of the country.
“Our country’s pension funds are some of the biggest in the world. When they invest in Britain, everyone benefits – from the construction worker on site, to the small business on the high street, to the saver seeing their pension grow. Sterling 20 shows what can be achieved when we all pull in the same direction to build a stronger economy that works for, and rewards, working people.”
António Simões, Group Chief Executive, Legal & General, said:
“As a long-term investor in the UK economy, L&G has a proud history of using pension capital to develop assets that deliver strong financial returns and lasting social impact. Our £2 billion commitment, targeted at housing, infrastructure, and urban regeneration, will help unlock the investment needed in productive assets across the country – creating jobs, strengthening communities, and driving both regional and national growth.”
Ian Cornelius, CEO of Nest, said:
“Every decision we make puts our members and their long-term outcomes first. We believe private assets can play a key role in delivering strong, consistent returns for them.
“That’s why the UK, with its exceptional investment opportunities, is a cornerstone of our strategy. From major infrastructure projects to ambitious small businesses, our investments are helping support economic growth across the country. We have already committed around £4 billion to UK private markets, and by 2030 we expect this to rise to around £12 billion. A strong pipeline of opportunities will be essential to realising this growth for the benefit of our members and the UK economy.”
Alastair King, Lord Mayor of London, said:
“The Mansion House Accord marked a pivotal step in pension investment reform – building on the foundations of the Mansion House Compact and signalling a clear industry commitment to channel investment directly into UK growth.
“This next stage transforms commitment into deployment by uniting the UK’s leading investors around a shared vision and coordinated strategy with government. British enterprise, from AI to renewable energy and infrastructure, is primed for investment. The Mansion House Accord signatories have stated their intent to deliver on the Accord’s promise to give British savers a meaningful stake in Britain’s growth while increasing returns.
AustralianSuper, Australia’s largest pension fund and 17th largest in the world, is also increasing its investment into the UK housing market.
Minister for Pensions Torsten Bell said:
“Our pensions system is one of the UK’s great strengths. We’re stepping up the pace of pension reform to support not just British pension savers but the British economy, supporting investment to deliver the growth of communities up and down the country.”
The formation of the Sterling 20 builds on July’s Mansion House Accord, which saw 17 providers representing 90% of active defined contribution scheme savers, commit to invest at least 5% of their main default funds in UK private markets.
All 17 signatories of the Accord, alongside annuity providers Rothesay and PIC, and the Pension Protection Fund have signed up to form the Sterling 20.
