Pensions aren’t the most exciting topic to write about. Most pensions stories focus on their affordability with an ageing population and longer lifespans. They talk about the retirement age increasing, benefits from company pensions reducing, and people not saving enough in private pensions, where they have them. This is a huge problem and it’s not going away, but this week I’d like to discuss what happens with the money which is actually invested.
UK pension funds hold trillions in assets, they’re a substantial percentage of the country’s overall wealth and an even greater proportion of investment activity. This isn’t money controlled by a few billionaires, it’s trillions of pounds belonging collectively to tens millions, through which they indirectly own a vast number of UK companies. The question is: would everyone be happy if they knew where their money was invested.
A few years ago a doctor who was horrified to discover that after years of treating cancer patients her pension was investing in cigarette companies, kicked-off a campaign to divest tobacco companies from pensions. Local government pensions in our county are all managed by West Sussex County Council and back when I was a county councillor I tried persuading the county council to join the campaign. Despite West Sussex being responsible for stopping smoking in our area, they said no.
Campaigners are now asking councils to remove fossil fuels from their investments, as part of the attempt to avoid climate catastrophe. Crawley has already delivered this with the council’s own investments, but West Sussex are again refusing to impose any restrictions on how local government pensions are invested in the county.
Nationally things aren’t much better. This week Labour tried to amend the Pensions Scheme Bill to commit funds to draw-up strategies for achieving carbon neutrality by 2050, in-line with the UK’s international commitment, yet the Conservatives again voted this down. Climate change puts us all at risk, our money should not be invested in ways which make our lives worse. If the UK is going to keep it’s promises on carbon reduction, we need concrete action now, including on pensions.