Billions will be unlocked to build affordable homes, power communities and connect the countryside, as the Chancellor joins forces with pension providers and insurers to drive growth in every region.
The Sterling 20 – a new investor-led partnership between 20 of the UK’s largest pension funds and insurers – will be established at the Regional Investment Summit in Birmingham, working with the Government and City of London Corporation to channel the nation’s savings into key infrastructure and fast-growing businesses in key modern Industrial Strategy sectors like AI and fintech. L&G have kicked off this investment drive with a £2 billion commitment by 2030, delivering around 10,000 more affordable homes for hardworking families and supporting 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 – delivering high-speed reliable broadband to rural homes and businesses in hard-to-reach communities.
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."
The Regional Investment Summit will also see the AustralianSuper, Australia's largest pension fund and 17th largest in the world, increase its investment into the UK housing market. The fund will meet with the Chancellor at the Regional Investment Summit, as the Government seeks to reinforce the UK as an attractive investment destination for the billions of pounds it will deploy outside of Australia in the coming years. Ahead of this, AustralianSuper has announced a new UK living investment platform dedicated to investment in rental homes as part of its ambition to invest £8 billion of new capital into the UK over the next five years
Damian Moloney, Deputy Chief Investment Officer at AustralianSuper: “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.”
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 comes as pension providers ramp up their investment in Britain.
It 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. This commitment will unlock over £25 billion for new UK housing infrastructure and high-growth industries.
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. Working with the Office for Investment, the Sterling 20 and Australian Superannuation Scheme – who manage a combined £5 trillion in assets - driving growth, creating jobs and putting more money in people’s pockets. Even a small shift towards investing in UK infrastructure would unlock billions.
The Office for Investment’s unique position as a bridge between government, investors and local leaders will allow it to match transformational investment opportunities with capital. It will leverage its visibility across the UK landscape to create a pipeline of opportunities that meet the Sterling 20 and Australian Superannuation Scheme’s investment ambitions and drive growth in every region of the country.