May 2020

Numbers to change the world

By investing pension funds in things that make life better for everyone we can support our customers’ financial futures, create shareholder value and improve our society. That’s inclusive capitalism and here we’ve included some of the numbers that tell our story


It’s predicted there will be a £1 trillion infrastructure gap in the UK between 2020 and 2030, and we believe that we, alongside others in the pension risk transfer (PRT) sector, can continue to help tackle this issue by using pension funding from PRT transactions to invest in the UK’s infrastructure.


In our latest report, ‘The power of pensions', we predict that up to £190 billion could be invested in infrastructure by insurers and PRT providers to back their pension promises over the next decade, helping to close the UK’s £1 trillion infrastructure gap.


Our £4.6 billion transaction with the Rolls-Royce pension scheme is a good example of how PRT deals work. We’ve committed to invest the money from the scheme, in assets including infrastructure, to secure its pension payments for the long term.


The potential size of the UK pension buyout market over the next 10 years is £770 billion. The market has grown significantly over the past few years, with more than £64 billion of pension schemes being de-risked in the last two years alone.

“By joining up pension savings with areas of under-investment, we deliver economically successful and socially useful outcomes”
Nigel Wilson,
Group CEO, Legal & General

When people pay into their pensions, or we take on responsibility for paying pension scheme members in a PRT transaction, we use that money to invest in things we all need, like renewable energy, infrastructure and housing. So far, we've invested £26 billion in real assets like these.


It's not all about investing in real assets like wind farms and buildings. We also invest in asset markets, providing the capital that companies need to grow and create jobs. Legal & General currently has around £1.1 trillion under management (as at 31 March 2020). And because we invest so much, we have the muscle to insist that those companies behave responsibly. For example, Royal Dutch Shell agreed to introduce industry-leading emissions targets after pressure from Legal & General and others.


We are helping to reshape the urban landscape through a £150 million investment into Sheffield’s West Bar Square, a 200,000-sq-ft development comprising office space, Build-to-Rent homes, a multi-storey car park and landscaped public spaces. We have partnered with developer Urbo and Sheffield City Council to help to regenerate the city and support the UK’s post-crisis growth prospects, jobs and housing needs. This follows our other urban regeneration projects in Cardiff, Salford, Newcastle and Sunderland.


So far, we’ve invested £1.3 billion in clean energy infrastructure including wind and solar farms. We’ve invested in onshore wind technology and have provided debt financing into three offshore wind farms with the capacity to provide enough power for more than two million homes. And we’ve announced a £57 million deal to support Hermes Infrastructure, who provides solar photovoltaic systems for more than 9,000 private residences and social housing rooftops.

“We are investing in socially and economically useful areas which create jobs, drive wage increases, change living standards and deliver returns”
Kerrigan Proctor,
CEO, Legal & General Capital

We are involved in some of the UK’s largest urban transformation schemes. In addition to our major regeneration projects in Leeds, Liverpool, Manchester, London, Bath, Cardiff and Newcastle, in 2019 we announced a £100 million commitment to back Sunderland City Council’s visionary plan for a new core business district, which will support the creation of around 3,000 new jobs in the area.


The green light has been given for the development of a £215 million retirement community in Surrey. The project, a partnership between Legal & General and Inspired Villages, will offer 270 apartments across the Grade II-listed site and will be one of the UK’s largest retirement communities. It will create 175 construction jobs each year over its six-and-a-half-year build period, up to 80 new permanent jobs once complete and operational, and see over £170 million invested in to the local economy.


To help support the UK through its housing crisis, we will be building 3,000 modular homes a year by 2024. Modular homes transform the way houses are built in the UK, in a process that sees quality, efficiency and productivity driven up and costs driven down. The first Legal & General Modular Homes development is taking place in Selby, North Yorkshire, and will create 180 jobs: 130 jobs across the supply chain and 50 new jobs in the Legal & General Modular Homes team.


A good example of how we’re making a difference is our £4 billion commitment to a 50:50 partnership with Oxford University to develop homes for staff and students and to build science and innovation districts in the city. House prices in Oxford make it hard to attract all the talent that’s needed but by building more homes and cutting-edge facilities we can help to put the city at the heart of a fourth industrial revolution.

“By 2030 all new homes built by our housing business will be capable of operating at net zero carbon emissions”
Nigel Wilson,
Group CEO, Legal & General

We build housing that is diversified across affordability, tenure and life stage. We deliver high quality build-to-sell, build-to-rent, affordable housing and specialist housing for the elderly. Our Affordable Homes business alone has used pension money to secure a pipeline of 3,500 new affordable homes on 41 sites across the UK, valued at £750 million. Within our wider housing portfolio, it’s our ambition to build 3,000 affordable homes annually by 2023.


We are investing in companies that are helping the UK meet its environmental challenges and, most recently, we took a 36% stake in The Kensa Group, one of the UK’s largest players in the ground source heat pump technology sector. Heating hot water makes up 25% of our energy use but Kensa’s technology is effective for creating homes with the lowest carbon emissions. We also invest in: Pod Point, one of the UK’s largest installers of electric vehicle charging points; Oxford PV, which is developing super-efficient solar panels; and Tokamak Energy, which is working to commercialise clean fusion power.

£230 million

We are helping to provide the infrastructure that our society needs to thrive in the modern world. We’ve invested £230 million in the Kao Data Campus, a state-of-the-art data centre that services businesses along the London to Cambridge corridor, the largest data centre market and technology cluster in Europe. Kao was named in honour of Nobel Prize-winning physicist Sir Charles Kao, who pioneered the use of fibre optics at the site of Kao’s first data campus development.


Following a £44.6 million partnership with Croydon Council in 2019 to provide 167 homes for families on the waiting list, in 2020 we provided an additional 250 homes to families in the London Borough. The £21.6 million investment will bring our total investment to £66.2 million and will help the Council meet its affordable housing needs, support the homeless community and demonstrates the positive social impact of a proactive long-term investment with a local authority.