A new investor-led partnership brings together 20 of the UK’s largest pension providers and insurers to collectively invest in regional economic development and support long-term, sustainable growth across communities.
Britain’s largest pension funds and insurers have joined forces with the UK government to increase long-term investment in affordable housing, infrastructure and high-growth industries through the ‘Sterling 20’ group, which was launched at the first Regional Investment Summit in Birmingham on Tuesday.
The new investor-led partnership will see 20 of the UK’s largest pension providers and insurers investing in regional development and modern industrial sectors such as AI and fintech.
The initiative follows the Mansion House Accord, announced earlier this year, which saw workplace pension providers commit to investing at least 5% of default fund assets in UK private markets by 2030, which is expected to unlock around £25bn (€28.8bn) for regional housing, infrastructure and business growth.
Rachel Reeves, the UK’s chancellor of the exchequer, said the new group demonstrates how pension savings can be used to deliver tangible economic outcomes.
“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,” Reeves said.
Legal & General announced it has pledged £2bn by 2030 to fund 10,000 affordable homes and create 24,000 jobs nationwide, while Nest, which represents a third of the UK workforce, will invest £500m through Schroders Capital, with £100m expected to be channelled into UK investments.
Nest will also invest a further £40m to extend high-speed broadband to rural areas in Scotland and northern England.
“Our £2bn 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 supporting regional and national growth,” said António Simões, chief executive of L&G.
International capital is also expected to play a role, with AustralianSuper, Australia’s largest pension fund, announcing a £500m UK living platform focused on rental housing and plans to invest £8bn in the UK over the next five years.
Positive social impact
The initiative will drive positive social impact for UK pensioners, said Calum Cooper, head of pension policy innovation at Hymans Robertson.
“The UK has to turn around decades of underinvestment in housing, energy, water and digital infrastructure. We’ve been living on the investments made by prior generations, and that’s a big driver of our flatline productivity. This has to change. The prior Mansion House Accord and Compact has built real market led momentum around pensions plugging in to UK investment opportunities that have a positive social impact for all, including the majority of pensioners who live here,” he said.
