Disclaimer: Views in this blog do not promote, and are not directly connected to any L&G product or service. Views are from a range of L&G investment professionals, may be specific to an author’s particular investment region or desk, and do not necessarily reflect the views of L&G. For investment professionals only.
Home truths: Pension savers’ views on the affordable housing crisis
Traditionally, affordable housing was seen as the remit of governments and charitable organisations. But demand has outgrown public funding’s reach. What role can pension providers and asset managers play in addressing the UK housing crisis? And, importantly what do pension savers think about their retirement savings being used in this way?
Our latest DC research – ‘Savings to shelter: Pensions’ role in addressing the UK housing crisis’ – explores this theme with 4,411 UK pension savers[1].
The UK’s housing challenge is stark. Compared to European averages, there is a shortfall of over six million homes[2]. Bridging this gap requires not only ambition but urgency – current build rates fall far below the level needed to meet long-term demand.
The ripple effects are broad and costly. According to the National Housing Federation, poor housing conditions cost the NHS £1.4 billion annually, with wider social costs exceeding £18 billion[3].
Solving the affordable housing puzzle requires a multi-sector response across public and private players.
Recognising this, in 2023, the UK government launched the Mansion House Compact – an agreement between major pension schemes (including L&G) and the treasury to unlock long-term capital for national priorities.
In May 2025, a new Mansion House Accord was formed, committing signatories to allocate a greater share of assets into private markets, with a focus on UK-based investments. While aimed at stimulating domestic growth, the initiative also paves the way for substantial funding in affordable housing.
The idea is to align pension funds’ objective to deliver for long-term, inflation-linked returns for pension savers, with the country's need for sustainable, affordable places to live.
Raising the roof
Importantly, attitudes are shifting at the individual level too. Our research found that 97% of those surveyed believe addressing the housing crisis is vital – whether for buying or renting.
These concerns are deeply personal: one in five renters surveyed doesn’t believe they’ll ever be able to afford to buy a home. Even among homeowners, over a third worry someone in their household could be affected by the lack of affordable housing.
Rising rents and unaffordable mortgages are leaving many behind. And for those approaching retirement, the prospect of renting into later life adds further complexity to financial planning and costs.
Beyond examining the societal need for affordable housing, we also sought to gauge respondents' broader views on it as an investment.
Approximately two-thirds said that investing pension money in affordable housing is a "win-win" situation, offering potential returns on investment while also helping to address the high costs of housing.
Over half of pension savers noted they would pay a little bit more for a pension which included investments in affordable housing, rising to 67% of Gen Z. From a monetary perspective, 83% said they would pay more than £50 extra a year and 33% said they would pay more than £100.
Overall, 73% of all pension savers surveyed said they were happy with pension companies using their money in this way.
When asked to prioritise areas for affordable housing, savers pointed to homes for low-income families, first-time buyers and retirees – groups most affected by market imbalances. These choices underscore the demand for housing that serves both current needs and future resilience.
This widespread concern spans generations and genders, highlighting a deep, national appetite for solutions.
This all reflects a broader shift: pension capital can go beyond growing retirement pots and also help support and rebuild the nation’s infrastructure. And as pension savers seek long-term returns through their investments; it’s not just about retirement, but about the society they’ll age into.
The ‘Savings to shelter: Pensions’ role in addressing the UK housing crisis’ research report can be read here.
Interested in reading more about DC pensions and investments? You can find our latest content on our designated DC blog page.
]1] An online survey of 4,411 pension savers (those aged 22-65 who are currently contributing to a pension). We also asked the same questions to a sample of 550 DC pension holders aged 55-75 who are now in decumulation to determine whether there are any differences in attitudes when people start to take their pension money – this detail can be read in the full report. The online survey was conducted in May 2025, by Ignition House on behalf of L&G, with 4,411 pension savers (those aged 22-65 who are currently contributing to a pension). The same questions were asked to a sample of 550 DC pension holders aged 55-75 in decumulation to determine whether there were any differences in attitudes when people start to take their pension money.
[3] National Housing Federation. Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Visit the newsroom to read our research press release.
Recommended content for you
Learn more about our business
We are one of the world's largest asset managers, with capabilities across asset classes to meet our clients' objectives and a longstanding commitment to responsible investing.
