The UK’s largest pension providers are preparing to inject £50 billion into venture capital and infrastructure by 2030, marking a major shift in how workplace pensions are used to stimulate economic growth. As part of the Mansion House Accord, 17 top pension funds — managing around 90% of Britain’s defined contribution pension savings — will commit to investing 10% of their portfolios into high-growth assets like private equity, property, and UK-focused venture capital.
Crucially, at least 5% of that allocation will target UK-based startups and innovation-driven projects, providing a long-awaited lifeline for the country’s tech and early-stage business ecosystems.
Signatories to the accord include major players such as Aviva, Legal & General, and M&G, who will begin deploying funds over the next five years. The initiative is seen as a cornerstone of the UK’s plan to re-energize its sluggish economy and support homegrown innovation following a difficult start to 2025 — exacerbated by trade tensions sparked by U.S. President Donald Trump’s global economic policies.
Pension Reforms Touted as a Catalyst for Startup Growth
The UK pension fund VC investment strategy was first proposed under the previous Conservative government and is now gaining momentum under Labour’s leadership. Finance Minister Rachel Reeves praised the move as a “bold step” that will channel billions into clean energy, infrastructure, and high-potential startups — all while boosting long-term retirement security for working Britons.
“Unlocking investment from pension funds delivers growth, boosts pension pots, and gives working people greater security in retirement,” Reeves said in a statement following the announcement.
The tech industry has strongly supported the reform. Dom Hallas, executive director of the Startup Coalition, said last year that pension fund reform could be one of the UK Treasury’s most powerful growth levers. “Once it’s delivered, we should see billions more into the British venture-backed tech ecosystem — which is not only good for founders, it’s good for the pensions of British workers too,” he said.
While today’s announced £50 billion commitment falls short of the £80 billion target floated in November 2023, the initiative still represents a significant new capital pipeline for UK innovation. Sifted has reached out to the Treasury for comment on the revised figure.
In a complementary move, the British Business Bank — the UK’s state-owned development bank — has also secured regulatory approval from the Financial Conduct Authority (FCA) to open up its VC pipeline to UK pension funds and institutional investors. This gives funds direct access to vetted startup investment opportunities, helping accelerate deployment and improve returns.
As the UK looks to fuel domestic innovation, plug funding gaps, and navigate turbulent global markets, the mobilization of workplace pensions toward venture capital and economic infrastructure could become a defining policy shift of the next decade.
