A 0.5 per cent pension shift could secure Britain’s tech supremacy
To solve the UK’s struggle to scale its world-class startups, we must unlock the nation’s vast pension funds for venture capital investment to fuel domestic growth and ensure technological sovereignty, says Dame Anne Glover
This week, as leaders gather at Mansion House to celebrate British innovation, we must confront a hard truth: the UK is world-class at innovation, but it’s still struggling to scale the companies which are started here.
The UK is at the forefront of a new industrial revolution – not driven by steam, but by silicon, software and artificial intelligence. AI alone could deliver £45bn in annual savings through public sector modernisation and raise productivity by 1.5 percentage points per year. It’s not just a technology story; it’s an economic imperative.
But innovation needs fuel. That fuel is capital – patient, risk-embracing capital that turns prototypes into payrolls. Here is the paradox: Britain has one of the largest savings industries in the world, with insurance and pension assets per capita around seven times the global average. Yet, just 0.007 per cent of UK and Irish pension assets are invested in venture capital – that’s less than one pound in every 14,000. In North America, that figure ranges from 0.5 per cent to two per cent – that is $1 in every $50-200. Our savers are long-term investors, locked into low-return, short-term assets. The opportunity cost is enormous.
We must strengthen the ladder between starting up and the long-term prosperity of our companies. And we can. I propose three practical steps to unlock the power of pension capital and keep our growth companies on UK soil.
First, we must add a rung of later-stage capital to the ladder. I invite every pension trustee in the Square Mile and beyond – to consider allocating just 0.5 per cent of assets to venture capital. That’s a 70-fold increase from today’s levels, but still well within normal risk tolerance thresholds. For any single scheme, it’s prudent, and for the nation’s growth engine, it’s rocket fuel.
This is not a call for mandation. Government should simply ask the Pension Regulator to set a clear, transparent return objective for long-term savings products. With clarity, trustees can choose the tools. Venture capital becomes a fiduciary choice, not a political gamble.
Evolve the Mansion House Compact
Second, we must evolve the Mansion House Compact into a deeper partnership for frontier tech. That means faster knowledge-transfer from labs to ledger, more allocations to venture, better regulatory pathways like the Innovative Licensing and Access Pathway (ILAP), and less red tape along the way.
Third, I urge industry leaders to become customers of our own brilliance. If your bank needs cybersecurity, pilot British deep tech first. If your asset manager seeks ESG analytics, test the AI built in Edinburgh before importing off-the-shelf solutions.
We’ve seen what success looks like. OrganOx, a spinout from Oxford, was seeded by the Royal Society Enterprise Fund and recently acquired for $1.5bn to lead a new organ transplantation division from the UK. PolyAI, born in Cambridge, now powers conversational AI from National Savings & Investments to Las Vegas casinos. Quantexa, founded in London, raised its Series F at a $2.6bn valuation and is pioneering Decision Intelligence globally. These are not unicorn myths, they are blueprints.
Every successful scale-up sparks a chain reaction: high-skilled jobs, resilient supply chains, national security, and wealth that recycles into the next wave. Success compounds.
And yet, across Europe, the ladder remains broken. Research inspired by Mario Draghi’s report on competitiveness shows that the US has produced 68 “decacorns” – companies valued at over $10bn – worth $30 trillion. The EU27 has produced just 13, worth $400bn. The UK punches above its weight, contributing three homegrown decacorns worth $160bn – nearly 30 per cent of the combined total. Yet our successful founders have had to look elsewhere for support to scale globally.
This is about more than economics. It’s about technology sovereignty. If the platforms that process our payments, protect our grids, and power our health systems are grown here, they are governed by our values, audited by our regulators, and secured for our citizens
This is about more than economics. It’s about technology sovereignty. If the platforms that process our payments, protect our grids, and power our health systems are grown here, they are governed by our values, audited by our regulators, and secured for our citizens. That, too, is nation-building.
Let’s back our entrepreneurs with belief, opportunity, and a policy environment that supports growth.
With the right capital, policy, and industry leadership, the UK can lead in the age of AI and frontier tech, delivering long-term returns for savers and securing our technological sovereignty. We succeed by working together.
Dame Anne Glover is chief executive and co-founder of Amadeus Capital Partners and non-executive director of the Court of Directors