Marvin OnumonuSmart Pension has put £330m into two funds managed by Octopus Energy Generation, aiming to boost the UK’s move to clean energy.
The investment is part of Smart Pension’s plan to put 15% of its default fund into private markets, backing projects that support long-term sustainable returns for its 1.5 million pension savers.
The pension provider will invest 5% of its default fund into the Sky and OETF funds, both run by Octopus Energy Generation.
These funds will help pay for a range of green energy projects, including the UK’s first investor-funded ground source heat pump network in South Wales.
The scheme, delivered by Kensa, will provide renewable heating and hot water for 114 new homes at Parc Eirin, with no gas used.
Octopus Energy Generation said the partnership will help turn pension savings into projects that cut emissions, reduce bills and support the UK’s energy targets.
Smart Pension’s 1.5 million members will be able to access materials such as case studies and carbon reporting, showing how their pension savings are making an impact.
Chancellor Rachel Reeves said: “Our reforms are about unlocking investment to deliver higher returns for savers, drive growth, and create good jobs.
“This means more money in the pockets of working people, our Plan for Change in action.
“That’s why I’m so excited about Smart Pension’s investment in the UK’s first commercially funded ground source heat pump network in South Wales, delivering returns, growth and jobs.”
Andrew Evans, group CEO and co-founder of Smart Pension, said: “As a leading workplace pension provider in the UK, we’re always looking for innovative ways to grow our members’ pensions and support the UK economy.
“That’s why we’re so proud to be investing in Octopus Energy, a fantastic British tech company, who set up next door to us when we set up our first offices a decade ago.
“By the end of next year, supported by innovative investments like this, we will have scaled and reached £10bn AUM.”
Evans added: “This collaboration will help deliver strong, long-term returns for UK retirement savers, and also will support efforts to lower household bills and reduce emissions for homeowners.
“It’s a great example of how UK tech businesses can come together to tackle important challenges, and create a positive impact.”
James Lawrence, director of investment proposition at Smart Pension, said: “We are dedicated to providing strong, sustainable returns for our members while supporting the country in a sustainable way to reach a low-carbon economy.
“Partnering with Octopus and Kensa allows us to invest in British infrastructure to deliver measurable environmental and social impact for years to come.
“From renewable surplus power generation to support local leisure facilities, to cutting-edge clean tech like heat pumps, these are the kinds of investments that not only align with our own ethical standards, but also help members feel a deeper connection to their pension savings.”
Zoisa North-Bond, CEO at Octopus Energy Generation, said: “This partnership shows how pension savings can literally power the future — turning contributions into green electrons that heat homes, replace gas boilers, and drive down energy bills.
“It brings everything full circle: the very money people are saving for retirement is helping to build the smarter, carbon-free energy system they’ll rely on in years to come.
“By teaming up with Smart Pension and innovators like Kensa, we’re proving that smart investment doesn’t just deliver long-term returns — it creates real, tangible change for communities and speeds up the UK’s journey to net zero.”
Tamsin Lishman, CEO at Kensa, said: “As pioneers in ground source heat pump technology, we are proud of our role in delivering the switch to better, more affordable heating and hot water, powered by ultra-efficient, ground source heat pumps designed and made here in the UK.
“The Parc Eirin investment demonstrates the transformative role private funding will play in helping both housebuilders and homeowners transition to effective, low-carbon heat – the critical next frontier in the UK for carbon reduction, which currently contributes around 13% of national greenhouse gas emissions.
“The investments made by Smart and Octopus Energy Generation are encouraging for the UK’s ever-growing renewables sector.”
Lishman added: “They will support the UK’s Net Zero goals, generate growth, and provide more well-paid green sector jobs.”
