The majority of defined contribution (DC) pension savers, 97 per cent, support investing their retirement savings into affordable housing, viewing it as a key social issue, according to research from Legal & General.
The survey of more than 4,400 DC savers suggests a link between real-world impact and saver engagement. Around 60 per cent said they would be more likely to engage with their pension if they knew it was helping to address issues such as housing.
More than half, 54 per cent, said they would be willing to pay more into their pension to support affordable housing, rising to 67 per cent among Gen Z. Additionally, 83 per cent were willing to contribute more than £50 annually, with a third prepared to pay over £100.
The research also showed that one in five do not own a home and believe they never will. Despite the higher costs of renting in retirement, 8 per cent of renters think they won’t need any additional savings. Among those who did anticipate a gap, 90 per cent significantly underestimated the amount needed, often by hundreds of thousands of pounds. Most estimated they would need £250,000 or less, falling short of industry forecasts of up to £400,000.
L&G launched its Affordable Housing Fund in July 2024. As of February 2025, it had raised £510m. The strategy is accessible to DC savers through the Lifetime Advantage Fund and, from the end of July, the L&G Private Markets Access Fund.
L&G head of UK DC distribution Jayesh Patel says: “The rise of renters in retirement underscores the urgent need for more affordable housing solutions. Our latest research demonstrates the power of private markets to deliver the change which savers wish to see. For asset managers and providers there is an opportunity to deploy DC capital towards creating homes for those most in need, while for members, they get to invest in initiatives that directly improve the communities in which they live. It is incredibly positive to see DC members support allocation to this critically important sector.”
L&G head of impact strategies – real estate, asset management Ali Farrell says: “A lack of affordable housing is a crisis which affects millions of people across the UK. We believe there is a compelling investment case for investing in affordable housing, an asset class which aims to generate a stable, inflation-linked cashflow alongside meaningful societal benefits in local communities. The research supports L&G’s commitment to mobilising pension capital towards an area of acute societal priority – helping savers with their current housing needs, as well as securing their retirements.”
