Smart Pension has committed to invest an initial £330m (€382m) in UK renewables via Octopus Energy funds.
The £7bnUK workplace pension provider said it will be investing 5% of its default fund into the Octopus Renewables Infrastructure (SKY Fund) and Octopus Energy Transition Fund (OETF) managed by Octopus Energy Generation.
OETF was launched in May 2023, with an investment in Cornwall-based heat pump business, Kensa Group to scale the roll-out of heat pumps in Britain. The fund seeks to target opportunities in sectors decarbonising the economy like heating, storage and transport.
Last year, Cornwall Pension Fund made a £40m commitment to OETF.
Sky Fund manages a diversified portfolio of £1.5bn in renewable-energy assets, including wind, solar and biomass, with approximately one-third of its capital specifically allocated to accelerate the growth of clean-energy infrastructure in the UK.
Smart Pension said the commitment to the funds is part of a 15% allocation commitment to private markets within Smart Pension’s default fund.
Rachel Reeves, chancellor of the exchequer, said: “Our reforms are about unlocking investment to deliver higher returns for savers, drive growth, and create good jobs. This means more money in the pockets of working people, our plan for change in action.
“That’s why I’m so excited about Smart Pension’s investment in the UK’s first commercially funded ground source heat pump network in South Wales, delivering returns, growth and jobs.”
Andrew Evans, group CEO and co-founder of Smart, said: “By the end of next year, supported by innovative investments like this, we will have scaled and reached £10bn assets under management.
“This collaboration will help deliver strong, long-term returns for UK retirement savers, and also will support efforts to lower household bills and reduce emissions for homeowners. It’s a great example of how UK tech businesses can come together to tackle important challenges, and create a positive impact.”
James Lawrence, director of investment proposition at Smart Pension, said: “Partnering with Octopus and Kensa allows us to invest in British infrastructure to deliver measurable environmental and social impact for years to come.
“From renewable surplus power generation to support local leisure facilities, to cutting-edge clean tech like heat pumps, these are the kinds of investments that not only align with our own ethical standards, but also help members feel a deeper connection to their pension savings.”
Zoisa North-Bond, CEO at Octopus Energy Generation, said: “This partnership shows how pension savings can literally power the future — turning contributions into green electrons that heat homes, replace gas boilers, and drive down energy bills. It brings everything full circle: the very money people are saving for retirement is helping to build the smarter, carbon-free energy system they’ll rely on in years to come.
“By teaming up with Smart Pension and innovators like Kensa, we’re proving that smart investment doesn’t just deliver long-term returns — it creates real, tangible change for communities and speeds up the UK’s journey to net zero.”
Tamsin Lishman, CEO at Kensa, said: “The investments made by Smart and Octopus Energy Generation are encouraging for the UK’s ever-growing renewables sector. They will support the UK’s Net Zero goals, generate growth, and provide more well-paid green sector jobs.”
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