Chancellor joins forces with pension providers and insurers to drive growth as HM Treasury announces launch of "Sterling 20 Initiative"

HM Treasury has announced the launch of the “Sterling 20 Initiative” group, which is a new investor-led partnership between 20 of the UK’s largest pension funds and insurers.

The group was established at the Regional Investment Summit in Birmingham on October 21, 2025, and will work 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”.

Two of the bodies which have made commitments to invest new funds in UK private markets across affordable housing are Legal & General and the National Employment Savings Trust (NEST). AustralianSuper, Australia’s biggest pension fund, is also expected to increase the level of its UK investment.

The formation of the Sterling 20 initiative builds on the Mansion House Accord from May 2025, where 17 UK pension providers pledged to invest at least five per cent of their main default funds in UK private markets. All 17 signatories of the Accord have signed up to form the Sterling 20, alongside two annuity providers and the Pension Protection Fund.

The 2025 Mansion House Accord in turn built on the earlier Mansion House Compact by increasing the commitment for pension providers to invest in private markets. As a reminder:

• The Mansion House Accord is a voluntary pledge by 17 of the UK’s largest workplace pension providers. Jointly led by the ABI, Pensions UK and the City of London Corporation with the support of the Government, signatories agreed to allocate 10 per cent of default DC pension funds into private markets, with five per cent committed to the UK.
• The Mansion House Compact is a voluntary pledge by 11 DC pension providers to allocate at least five per cent of default funds to unlisted equities by 2030. For providers signed up to both the Accord and the Compact, progress under the Compact counts towards meeting the Accord’s goals.

The regional growth drive aims to fund the development of local infrastructure, affordable housing and urban regeneration. Legal & General has committed £2bn by 2030 to deliver an estimated 10,000 affordable homes and create 24,000 jobs nationwide. NEST (whose membership comprises a third of the UK workforce) will provide Schroders Capital with £500m, of which £100m will be channelled into UK investments. NEST will also invest £40m in developing broadband connections to remote areas in Scotland and Northern England.

On October 16, 2025, the Association of British Insurers published a second annual progress report on the Mansion House Compact, highlighting the steady progress on their ambition to increase pension investment into unlisted equities and deliver long term value for DC pension savers.