Major UK Pension Funds Commit £40m to Improve Rural Broadband UPDATE

The UK Government has announced the launch of the Sterling 20 initiative, which is a partnership of the country’s twenty largest pension funds and insurance companies (Nest, Aviva, Legal & General, M&G etc.) that have all agreed to pump extra investment into local infrastructure and businesses to boost growth. Rural broadband will be one of the winners.

All of the participants say they’ve agreed to “channel the nation’s savings into key infrastructure and fast-growing businesses in key modern industrial strategy sectors like AI and fintech”. As part of this, Nest, which is currently said to represent approximately 46% of the UK’s working population, has already committed to invest £40m into expanding the reach of fibre optic broadband across rural parts of Scotland and northern England.

At present the full details of how this new broadband funding will be used have not yet been revealed, although it’ll need to be respectful of the existing Project Gigabit programme. The latter is already doing a fair bit of the heavy lifting alongside existing commercial investments in remote rural areas.

It’s possible that other members of the new scheme may also commit some funding toward broadband, although the main focus seems to be on other areas like housing development. For example, Legal & General has made a £2bn commitment to invest in delivering 10,000 affordable homes by 2030.

The UK Chancellor, Rachel Reeves, is expected to reveal more details when she hosts a related Regional Investment Summit in Birmingham this week.

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.”

The announcement follows shortly after the government launched a fresh drive to encourage pensions firms to commit more of their private investment toward the country’s science and technology sectors – supported by a new Innovation Cluster Map (here). Prior to that, the Mansion House accord, which was agreed in July 2025, had seen 17 pension providers pledging to commit at least 5% of their main default funds in UK private markets (c.£25bn).

As we say, little detail currently exists over how any funds that are committed to improve rural broadband will actually be spent, although the most likely area of focus will probably be on tackling those very hard to reach remote rural communities. Such areas are often too expensive for even Project Gigabit to tackle (this represents somewhere around 0.3% of UK premises).

The government has yet to set a clear strategy for such areas and the 10Mbps Universal Service Obligation (USO) for broadband is now overdue for a proper review (here).

UPDATE 1:02pm

The full members list of the Sterling 20 group are now confirmed as: Aegon; Aon; Aviva; L&G; LifeSight by WTW; Mercer; M&G; NatWest Cushon; Nest Corporation; NOW Pensions; People’s Partnership; Phoenix Group; Royal London; Smart Pension; SEI; TPT; USS – Universities Superannuation Scheme; Rothesay; PIC – Pension Insurance Corporation; PPF – Pension Protection Fund.