BT pension scheme reports £300m loss on Thames Water stake
12 reported2 unconfirmed
The BT pension scheme lost £300 million after writing off its holding in Thames Water, the UK’s largest water company, which is under pressure from a £20 billion debt pile. The loss followed BT’s decision to write off its 8.7% equity stake in Thames in 2024, according to a presentation to analysts captured in a video, as first reported by the Financial Times. BT also stated that the pension scheme sold its debt in the utility to avoid a further write-down, without providing details. Shan Abdullah, who leads the pensions risk team at BT, said the equity stake had been written down by about £300 million and that the scheme’s debt exposure to Thames was sold off before needing to be written down. The scheme first invested in Thames in 2012 with a 13% stake, sold 4.36% of it in 2017, and now has no exposure to Thames bonds. A spokesperson for the pension fund said the scheme is well diversified, so challenges from a single investment do not materially impact the overall portfolio. Thames is moving closer to public ownership after the UK environment secretary objected to a £10 billion rescue proposal last week, citing an “undue burden” on consumers.
What’s reported
The BT pension scheme lost £300 million after writing off its 8.7% equity stake in Thames Water in 2024.
The scheme also sold its debt in Thames to avoid a further write-down, according to BT.
Shan Abdullah, BT’s pensions risk team lead, confirmed the equity write-down was about £300 million.
The scheme first invested in Thames in 2012 with a 13% stake, sold 4.36% in 2017, and now has no exposure to Thames bonds.
A pension fund spokesperson said the scheme is well diversified and the loss does not materially impact the overall portfolio.
Thames Water is moving closer to public ownership after the UK environment secretary objected to a £10 billion rescue proposal.
The regulator Ofwat was close to a deal allowing Thames to avoid new fines over sewage leaks for four years in return for a cash injection from creditors.
The We own it campaign group called on Andy Burnham, likely next prime minister after Keir Starmer’s resignation, to nationalize Thames.
Burnham said Thames should be nationalized and public ownership would “absolutely be an option” if he became Labour leader.
BT will announce the triennial valuation of its pension scheme next week, covering payments for the next three years to about 213,600 retired employees.
The £33.2 billion pension scheme, closed to new members in 2001, pays £2.9 billion in benefits annually and is managed by Brightwell Pensions.
BT disclosed a pension deficit of £4.2 billion at the end of March, up from £4.1 billion a year earlier, due to updated views on mortality, inflation, and lower asset returns.
Open questions
The specific details of how the BT pension scheme sold its debt in Thames Water are not provided.
The exact terms of the Ofwat deal to avoid fines for four years are not fully detailed.
Key figures
Shan Abdullah, pensions risk team lead at BT
Andy Burnham, likely next prime minister after Keir Starmer’s resignation
Keir Starmer, former prime minister who resigned on Monday
The We own it campaign group
The UK environment secretary (not named in article)
Sources: The Guardian
