Recent publicity in The Times has drawn further attention to the disgraceful British government practice of freezing the UK pensions of a few [4%]UK pensioners most of whom happen to live in the Commonwealth countries. This has been going on now for over 60 years.
The Times article can be read below;
Five reasons to end this pensions injustice
Times Newspapers Ltd David Budworth Published at 5:45PM, May 30 2014
“Offensive”, “appalling” — just some of the tart words I heard this week while looking into the plight of the estimated 560,000 retired expats who are denied an annual rise in their state pension (see page 56). And in this case it is justified.
Many of those affected paid national insurance all their working lives in the belief that it would give them the same pension rights as everybody else. They retired abroad with no idea that their pensions would be frozen, not up-rated with inflation like most of their fellow pensioners.
Successive governments have wriggled out of taking action. The prime minister has hinted he sympathises with the expats’ predicament but won’t be making any imminent changes.
In 2007, when Labour was in power, a Liberal Democrat MP called Steve Webb signed an Early Day Motion urging “the Government to bring forward proposals to end the evident unfairness in the current arrangement”. So it is dispiriting that in March this year, the same Mr Webb, now pensions minister, said the Government “has no plans to relax the current restrictions”.
Here are five reasons why both should think again.
1 “We have a contributory pension system. We ask people to make contributions all their life to accrue an entitlement. Why should that accrued entitlement vary according to where they choose to live?” So said Mr Webb back in 2004. We pay national insurance contributions to qualify for certain benefits, including the state pension. Put a sufficient amount in and you are supposed to be able to get a certain amount out. Changing the rules based on where you live is blatantly unfair.
2 About 660,000 expats retired to countries where pensions are increased each year to keep pace with inflation. The choice of countries lacks logic. Jamaica, Barbados and Bermuda are not frozen, the rest of the Caribbean is. This results from arbitrary agreements negotiated over many decades. The agreements with many Commonwealth countries date back to the 1950s when inflation in retirement wasn’t thought of as an issue. The world has moved on, government policy has not.
3 The pensioners want their payments brought up to the level paid in the UK and then up-rated like everyone else. They are not demanding that it be backdated, which means that the cost will be limited to hundreds of millions a year, not billions. Their pensions are already increased when they spend time on holiday in the UK or other countries where pensions are unfrozen, but only until they head back home.
4 It creates ill will overseas as we have a free ride on the welfare states of other countries, expecting their taxpayers to support pensioners in hardship.
5 People sneer: “Why should we support the stinking rich who have moved abroad for a better quality of life?” Such caricatures don’t reflect reality. Many expats are not wealthy and retire abroad to be closer to family.
I want to give the last words to Mr Webb, unfortunately from 2004 not now, because I couldn’t put it better. “Should we penalise those who retire overseas to be with their children, or should we say, ‘You’ve worked hard and paid hard. It’s your pension — take it with our blessing’?”
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It seems from a poll the ICBP commissioned with OnePoll that over 60% of those questioned were of the view that this British practice is unacceptable and that over 40% would vote for the party which put an end to this blatant discriminatory practice.
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