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LucyGransnet (GNHQ) Thu 12-Feb-15 17:32:53

My battle with a frozen pension

To be closer to her son, 79 year old Rita Young decided to relocate from Peterborough to Australia. But she soon discovered that upon leaving the UK her state pension had been frozen, and would remain so throughout her time there. Unable to finance the move and with no one left to call upon, she explains the harsh injustice of this government policy.

Rita Young

My battle with a frozen pension

Posted on: Thu 12-Feb-15 17:32:53


Lead photo

Rita Young

When my son Colin moved to Australia in 1981 to start a family of his own, I missed him dearly. The thought of not seeing him and my future grandchildren (my granddaughter married in December) grow up deeply troubled me – a feeling I’m sure many of you can relate to.

So, after retiring in 2002 my late husband and I made plans to relocate to Australia to be closer to our family. But when we looked into what this would mean financially, we were completely shocked to find that if we moved our state pensions would be frozen at the rate as when we left – and for the rest of our time there. We knew that year on year we would become progressively worse off and wouldn’t be able to afford to live without being a burden to our son and daughter-in-law – something we weren’t prepared to do, so we decided to stay in the UK.

I now find myself alone, with no family around me after my husband died in 2004, having to make do with a weekly Skype call to Australia. Whilst I’m still perfectly capable and independent now, I worry about the future and what will happen to me when my health deteriorates and I’m left with nobody close by to call upon.

Like all of us affected, I believed while I was working and paying national insurance contributions until the age of 67 that I was safeguarding my future financial security wherever I chose to live.

In some ways I consider myself lucky that I found out about frozen pensions when I did. Given the fact that the policy isn’t widely publicised, thousands of British pensioners move overseas only to find their pensions frozen. As a result, some 560,000 British pensioners living in more than 120 countries worldwide (ironically largely Commonwealth countries such as Australia, Canada, South Africa and New Zealand) are affected, whilst those living in places such as Europe and the US receive annual increases to their state payments as if they lived in the UK. The policy really is illogical as it sounds; a result of half-finished bilateral agreements with overseas governments.

But it’s the complete injustice of the whole situation that still gets to me. Had my son moved to a different country, I would be able to live near him but because he chose Australia, I can’t. Like all of us affected, I believed while I was working and paying national insurance contributions until the age of 67 that I was safeguarding my future financial security wherever I chose to live. Now I sacrifice a social life so that I can save money for trips to Australia once every few years.

Through this archaic frozen pension policy, the government continues to force people like me to make a choice between being close to family and making ends meet. If you are considering moving to be closer to your loved ones that have moved away or perhaps just want to retire abroad, you need to be aware of what this might mean for your pension and for your future well-being.

All we ask the government is to be treated as equals.

The International Consortium of British Pensioners (ICBP) are campaigning for the half a million British pensioners affected by this cruel government policy. For more information including a full list of affected countries visit the website.

By Rita Young

Twitter: @pensionjustice

mollie65 Thu 12-Feb-15 18:09:16

if Rita is 79 she would not have paid NI till she was 67 as she would have a pension from 60.
would she not have been eligible for an Austrralian pension with a reciprocal arrangement to obtain credit for NI years paid in the UK. I spent 4 years in Canada and when I was 65 I was able to get credit for the 4 years I paid the NI equivalent in Canada.

absent Thu 12-Feb-15 18:23:48

mollie65 There is no reciprocal arrangement with some countries, Australia being one of them. New Zealand, where I now live, is another. Although I was receiving a full state pension when I left the UK in 2013 and I still pay income tax there, my state pension is frozen at the 2013 rate.

Ana Thu 12-Feb-15 18:25:42

I'd have thought that anyone considering emigrating to Australia, for whatever reason, would be made fully aware of the financial implications before they made a final decision - as indeed Rita and her late husband were back in 2002.

mollie65 Thu 12-Feb-15 18:30:18

maybe it was because I was working in Canada and paying their NI - that is reciprocal in the sense that it counted in supplementing the years NI I required in the UK
I am sure if I now went back to Canada my pension would be frozen.
if my only family were in a far-flung country and the choice was miss them or a frozen pension - I know which I would take.
much as I feel sympathy my comment re not paying NI after 60 is still relevant.

absent Thu 12-Feb-15 18:46:48

Ana You have to find out for yourself; no one else makes you fully aware, except once it's a fait accompli. Like so many things in life.

Ana Thu 12-Feb-15 18:53:50

I accept that, absent. I was assuming that the vast majority of people thinking about emigrating would take financial advice before they actually did so.

Mishap Thu 12-Feb-15 18:54:31

It does seem an anomaly that retaining pension increases should be based on where you live. It would seem fairer if the rules were the same for any country. If you are entitled to the pension on the basis of the rules of the UK, then it does not seem fair to lose that entitlement - either you are entitled to it or not.

J52 Thu 12-Feb-15 19:01:32

The whole idea of emigrating to Australia when you are over retirement age is a real heart and head issue.

inurances and healthcare costs are something that would put me off, if I was relying on state pension.


NfkDumpling Thu 12-Feb-15 20:57:03

People have been campaigning about this for donkey's years and not got anywhere.

I wish them luck!

durhamjen Thu 12-Feb-15 21:12:38

So what should happen, Mishap, if you move to a country where the cost of living is a lot lower than the UK? Should you still get pension rises based on the cost of living in the UK?

granjura Thu 12-Feb-15 21:26:35

Well we (and yes I know our choice, but it is where my roots are)- moved to a much more expensive country- fortunately with a reciprocal arrangement with the UK so pensions not frozen. BUT, like many who moved ot Europe, but to a much larcher extent- we have lost almost 50% of our pensionable income- just to exchanges rates, of which we have no control whatsoever. The £ was 2.52 (Swiss francs) when we moved here- it then fell 4 years later to 1.18!!!! and now back to the half-way line, at 1.34.

There is absolutely nought we can do about it, apart from tightening our belt and not do the alteration work to the house we had planned. Of course, should we ever decide to sell up and go back to UK, we would double our money! Not on the plans as yet, but you never know.

Many people moved to France or Spain or other part of Europe on retirement, having calculated they could just about do it- and have fallen prey to exchange rates- are now unable to sell without taking a huge loss- and then if coming back to UK, would never be able to buy any kind of property, unless they go to parts of the UK which have remained cheap, like the North-West, for instance.

Not easy- but I'd say wide exchange rate fluctuations can hit much harder than a frozen pension, perhaps.

durhamjen Thu 12-Feb-15 21:34:27

The Lake District is very nice, though, Granjura, as is the Northumbrian coast in the North East.

granjura Thu 12-Feb-15 21:37:56

Gorgeous, I agree- But I can assure you properties in the Lake District are not cheap, are they? I am a huge fan of England, I can assure you- and am forever telling people here just how beautiful it is.

If we moved back, it would be to East Leics- where we could be near fast train to London and the Continent, lovely countryside and small market towns, lots of friends, near Rutland Water and Rutland- and where prices are quite reasonable.

granjura Thu 12-Feb-15 21:54:05

Just looked at Rightmove for the Lake District, it took 66 pages before prices dropped to below 400!!!! Wow. My part of Switzerland is much much cheaper, lol.

Eloethan Thu 12-Feb-15 22:30:49

It is completely wrong that people who emigrate to Canada, Australia and New Zealand have their pensions frozen.

Three or four years ago a friend of mine who is in her 80's moved to Canada to be near her sons - one nearby and one in the US. She knew that her pension would not be upgraded but I know it is a worry for her when her rent (in what sounds like a very nice elderly people's complex) keeps going up each year.

Some very elderly pensioners who emigrated years ago and who have very small pensions must surely get some sort of government top-up financial assistance otherwise they would starve?

Mishap Thu 12-Feb-15 22:32:53

I do not think that the cost of living in the country should be relevant. If someone has built up an entitlement here through their or their OH's contributions, that should be honoured on the same basis as anyone else, wherever they live.

durhamjen Thu 12-Feb-15 23:30:55

Does that mean you think they should get the benefits without paying the taxes, Mishap?

durhamjen Thu 12-Feb-15 23:31:58

Granjura, the Lake District is the North West.

GrannyTwice Thu 12-Feb-15 23:35:05

But dj- firstly , the pension was earned and secondly, if you live, for example, in France you get the pension with up ratings without paying UK taxes. It's the sheer unfairness of the disparity bewteen treatment in different countries that's the real issue.

durhamjen Thu 12-Feb-15 23:43:12

Careful what you wish for, then.
When the disparity between men's and women's pensions was changed, it was evened up so that women were worse off. Is there any reason why it cannot be evened up by not giving uprating to anyone who moves abroad?

absent Fri 13-Feb-15 05:44:14

j52 If you're past retirement age, the chances of getting residency in Oz, even if you have family there, are pretty low.

Not so in New Zealand. I do resent the fact, although I knew before I left the UK, that I was entitled to a full state pension, plus annual increases, if I stayed in the UK but I would not be entitled to the increases in New Zealand. It seems reasonable to make adjustments for those still of working age and not yet entitled to a state pension, but mine was already a fait accompli. Why does it matter where I live on the planet?

mollie65 Fri 13-Feb-15 06:55:12

but the figures do not add up
assuming Rita is in receipt of the average state pension - £150 a week - this would be frozen. Now we all know that the state pension increases rarely amount to more than 1 or 2 % each year (CPI or RPI?) so in say 10 years the increase above the frozen amount would not be that great
the cost of a flight to Australia would be £500+
assuming Rita has a house here - selling that would raise a tidy sum which could be eked out over the next 10 years.
And no female pays national insurance until they are 67 if they had a SRP age of 60.
I am sure her family there would look after her - and she would not miss out on the joys of being with them - well worth it in my opinion.
I wonder why certain countries were excluded though - there must be an historical reason. hmm

J52 Fri 13-Feb-15 07:23:43

Absent: do you think the policy in OZ, re: retirees residency is because they know they would struggle?

I know their emigration rules change, but I thought that if you had your only child, or majority of adult children living there you could go. ?

I also thought that if you have over £ 375000 you could go to Canada as a retiree.

I may be wrong. x

Riverwalk Fri 13-Feb-15 07:27:45

I agree with mollie - Rita gave up the chance to spend the past 13 years with her son and family in Australia for the sake of a few hundred pounds; and she's obviously since spent much more on the cost of flights.

Add to this she was also unfortunately widowed for most of this time - I think they made the wrong decision in 2002, if it was based solely on the frozen pension situation.

Also, can you really finance a new life in another country relying only on your state pension, frozen or otherwise?