British Retirees Watch Pension Leak Into The Gulf

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The oil spill in the Gulf has BP taking a battering in the media and on the London Stock Exchange. Shares in the oil company have lost a third of their value since the crisis began. BP is a major source of investment-income for Britain's pension funds, and many British seniors feel they are watching their pension leak away.

STEVE INSKEEP, host:

Investors are continuing to bailout out of BP stock today. Yesterday the oil company's shares plunged 13 percent. We should remind you that BP is a British company with a storied history and a lot of investors in Britain who are feeling the pain now.

Vicki Barker reports from London.

VICKI BARKER: Since the Deepwater Horizon blew in April, BP has spent close to a billion dollars trying to cap and clean up. BP's stock has lost about $60 billion.

Analyst David Battersby.

Mr. DAVID BATTERSBY (Analyst): It's probably fallen by more than it's actually going to cost them. But there's the political capital that its going to lose as well.

BARKER: BP is a giant on Britain's business landscape. It accounts for some six percent of the value of London's FTSE 100 Index. It's also the country's biggest dividend payer. BP says it accounts for one out of every $7 paid into British pension funds by British companies.

Analyst Tom McPhail had this warning for Britain's retirees.

Professor TOM MCPHAIL (University of Missouri, St. Louis): When you see that oil flowing out into the Gulf, it's not just an environmental disaster. That is your retirement income that's flowing out into the Gulf there.

BARKER: The bad news for Britain's seniors is that the markets seem to be betting not just that the spill and the accompanying cleanup and legal costs will balloon even further, but that BP may ultimately have to withdraw from the U.S. entirely.

For NPR News, I'm Vicki Barker in London.

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