Investment aimed at tackling social problems in the UK reached £13.2bn by the end of 2025, according to new research from Better Society Capital.
The market grew by 17% in a year, with £2.2bn invested across more than 1,000 deals during 2025. Pension funds are behind much of that growth, accounting for one-third of the market, up from one-fifth two years earlier.
Affordable housing leads the way
Social and affordable housing remains the biggest area for investment. Outstanding investment in the sector rose 21% to £7.3bn, representing 55% of the total market. New investment reached £1.2bn during the year.
Pension funds have more than doubled their social investment allocations since 2023, from £2.1bn to £4bn, with most of the money going into housing. Insurance companies have also trebled their commitments, although from a smaller starting point.
Social lending was worth £4.7bn, while investment in impact-focused start-ups passed £1bn for the first time, despite a fall in new capital committed to ventures during 2025.
The research draws on information from 100 funds and social investment programmes, covering around 6,300 active transactions. Better Society Capital says institutional investors are likely to remain involved as housing and other social investment areas build longer track records.
Why it matters for Britain
The figures point to more funding for affordable housing, charities, social enterprises and organisations working on issues including homelessness and health inequality. They also suggest pension savings are increasingly being channelled into projects intended to deliver both financial returns and measurable social benefits.
