A follow-up to my scoop that housing pension schemes are invested in lenders charging sky-high rates of interest to vulnerable tenants:
Social landlords are staunch opponents of money lenders who target their tenants with sky-high interest rates. So how did the sector’s pension schemes end up investing in at least three such companies and what, if anything, can be done about it? Jess McCabe reports
Shock is the predominant reaction from senior housing figures at the revelation that two of the sector’s pension funds own shares in high-interest money lenders, commonly referred to as payday lenders.
Geeta Nanda’s response to the news is typical of her peers. ‘I didn’t know that,’ says the chief executive of Thames Valley Housing Association. ‘Well, that’s outrageous. As a member, that is not what we would expect. Ethical investment is what we are and what we do. And that’s not ethical.’
Many other chief executives also assumed that the Pensions Trust, which manages both the £2.6 billion, 64,950-member social housing pension scheme and the £450 million, 8,400-member Scottish housing associations’ pension scheme, would not make such investments – and would, in any case, implement an ethical investment policy.
So how did housing staff end up unwittingly investing in high-interest doorstep and payday lenders – the very companies that many in the social housing sector have described as ‘legal loan sharks’ and actively campaign against? And, given that pension funds are not obligated to reveal what they invest in, what other companies might be hidden in the pensions ‘black box’?