UK pension providers in talks for £1bn Scale-Up Fund

News July 27, 2026 Martin Coulter 2 min read The UK's biggest pension funds are in talks to launch a £1bn investment vehicle dedicated to backing British tech scaleups, in the latest attempt to unlock more domestic capital for the sector. A consortium of pension providers, including Railpen and Nest, is working with the British Business Bank on the proposed new UK Scale-Up Fund, aiming to create a first-of-its-kind vehicle to help homegrown startups commercialise, expand internationally and create jobs. The announcement comes just weeks after Sifted revealed France was seeking to block the UK's participation in the EU's own €5bn Scaleup Europe Fund, casting doubt over British startups' access to one of the continent's biggest new sources of late-stage capital.

In a statement released on Monday, prime minister Andy Burnham described the proposal as “a vote of confidence in British business, British talent and British ambition.” He said: “This new fund would help unlock good growth in every postcode, connecting pension investment with the entrepreneurs and technologies that will reindustrialise Britain and create the jobs of the future.” The fund would seek to generate long-term returns for pension members by investing in successful UK companies, while supporting economic growth through innovation and job creation.

"Our priority is always to deliver strong long-term outcomes for our members," said Railpen CEO Andy Bord. "The UK Scale-up Fund represents a compelling investment opportunity where disciplined, patient capital can help growing companies scale." Nest chief Ian Cornelius added that the pension provider saw "an important role for pension capital in helping successful UK businesses access the funding they need to grow."

The proposal follows years of debate over the UK's shortage of domestic growth capital. While Britain boasts one of the world's largest VC markets, many of its most successful startups still depend on foreign investors to fund later-stage growth, prompting repeated calls from founders, investors and policymakers for UK pension funds to play a larger role in backing homegrown tech companies. Martin Coulter Martin Coulter is Sifted's news editor, based in London.

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