£330m initial investment will deliver long-term value for pension savers
Smart Pension, one of the UK’s leading workplace pension providers, today announces an initial £330m strategic investment in two funds managed by Octopus Energy’s renewable arm, Octopus Energy Generation, to fast-track the UK’s transition to clean energy. This commitment supports innovative companies like Kensa, a leading manufacturer of ground source heat pump technology, to generate sustainable growth for Smart’s 1.5 million pension savers.
The move is part of a 15% allocation commitment to private markets within Smart Pension’s default fund and reinforces its commitment to long-term sustainable investment while helping the UK to accelerate the transition to a netzero economy.
Smart Pension will invest 5% of its default fund in two flagship funds managed by Octopus Energy Generation – Sky (Octopus Renewables Infrastructure SCSp) and OETF (Octopus Energy Transition Fund SCSp), both of which carry the highest sustainability ratings.
This commitment will help finance a broad range of green energy projects, including the UK’s first investor-funded ground source heat pump network in South Wales, delivered by Kensa. The project will provide affordable renewable heating and hot water to 114 new homes at Parc Eirin and position ground source heat pump networks as an investable low-carbon utility. The homes will be part of the new generation of housing developments built without gas as the UK moves toward net zero.
As one of Europe’s largest renewable energy investors, Octopus Energy Generation brings 15 years of experience and a £7 billion portfolio of over 270 wind, solar, and battery projects across 21 countries to help turn pension savings into real-world solutions that cut emissions, reduce energy bills, and accelerate the global energy transition.
As part of the investment, Smart Pension’s 1.5 million members will have access to a range of materials, including case studies and carbon reporting, to help them better understand how their pension savings are making a real difference both financially and environmentally.
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:
“As a leading workplace pension provider in the UK, we’re always looking for innovative ways to grow our members’ pensions and support the UK economy. That’s why we’re so proud to be investing in Octopus Energy, a fantastic British tech company, who set up next door to us when we set up our first offices a decade ago. By the end of next year, supported by innovative investments like this, we will have scaled and reached £10bn AUM.
“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:
“We are dedicated to providing strong, sustainable returns for our members while supporting the country in a sustainable way to reach a low-carbon economy. 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:
“As pioneers in ground source heat pump technology, we are proud of our role in delivering the switch to better, more affordable heating and hot water, powered by ultra-efficient, ground source heat pumps designed and made here in the UK. The Parc Eirin investment demonstrates the transformative role private funding will play in helping both housebuilders and homeowners transition to effective, low-carbon heat – the critical next frontier in the UK for carbon reduction, which currently contributes around 13% of national greenhouse gas emissions.
“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.”
Smart Pension’s membership is set to rise to over 2 million by the end of 2025 through further growth and consolidations, including up to 300,000 members and assets from the consolidation of Options Master Trust, expected to transfer to Smart Pension in the coming months.
Smart Pension launched in 2015 in response to the implementation of auto enrolment legislation, rolling out seamlessly to businesses across the UK, and it has become one of the fastest growing master trusts in the UK.
