Marvin OnumonuBritain’s biggest pension funds have joined forces to back a regional growth drive, unlocking billions to build affordable homes, improve broadband in rural areas and support growing businesses.
Chancellor Rachel Reeves met with pension providers and Australia’s largest fund at the Regional Investment Summit in Birmingham, as the Government aims to push regional growth and put more money into people’s pockets through the Plan for Change.
20 of the UK’s largest pension funds and insurers are launching the Sterling 20 group, working with the Government and City of London Corporation to channel savings into infrastructure and sectors like artificial intelligence (AI) and fintech.
Legal & General (L&G) has committed £2bn by 2030 to deliver 10,000 affordable homes and support 24,000 jobs across the country.
Nest, which represents a third of the UK workforce, is providing Schroders Capital with £500m, including £100m for UK investments in the coming years.
Nest will also invest £40m to deliver gigabit-capable fibre broadband to remote areas in Scotland and Northern England.
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 CEO at 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 at 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.”
Cornelius added: “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 the government.
“British enterprise, from AI to renewable energy and infrastructure, is primed for investment.”
King added: “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 is increasing investment in the UK housing market and has announced a new UK living investment platform.
The fund aims to invest £8bn of new capital into the UK over the next five years and grow its UK assets to £18bn by 2030.
Damian Moloney, deputy chief investment officer at AustralianSuper, said: “The Superannuation Mission offers a valuable opportunity to share insights, deepen collaboration and build on the strong investment ties that exist between Australia and the UK.
“As the launch of our new £500m UK Living Platform demonstrates, AustralianSuper continues to view the UK as a key global investment destination.
“With the Fund on track to grow its UK assets to £18 billion by 2030, we look forward to further facilitating investment between the two countries for the benefit of members.”
Pensions Minister 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.”
Tom Pearce, CEO at Rothesay, said: “The Sterling 20 is a fantastic initiative which will enable the UK’s largest asset owners to deploy capital more effectively into the critical infrastructure and national priorities which are so vital to our economic growth.
“As the UK’s largest specialist pensions insurer, Rothesay invests at scale across the country and we are committed to working with the government to deliver the innovative solutions which will unlock even greater volumes of domestic investment from our sector.”
Andrea Rossi, CEO at M&G Plc, said: “UK pension providers have a great opportunity to drive economic growth and give savers the returns they need for retirement.
“The Sterling 20 Group offers a powerful platform for institutional investors to shape the country’s future from long-term investment in housing, infrastructure or strategic national projects.
“As a UK-listed savings and investment company investing £100 billion domestically, we are proud to be playing our part.”
Andy Briggs, CEO at Phoenix Group, said: “Through the Sterling 20 we are helping to unlock billions in long-term investment that will support communities, build critical regional infrastructure, and fuel innovation across the UK.
“This is about putting our customers’ savings to work in ways that grow their pensions and grow the economy.
“This landmark initiative brings together the scale and strength of the UK’s pension and insurance sector to invest in Britain’s future.”
