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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

(153 comments )

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

granjura Fri 13-Feb-15 10:27:24

Agreed- as said before, the differences in actual vaues are likely to be affected much more by differences in exchange rates- as we well known, having lost almost 50% since we made the move here.

jinglbellsfrocks Fri 13-Feb-15 10:44:17

It's about time someone somewhere pulled their finger out and got this sorted. It sounds totally unfair. Why are the reciprocal arrangements complete with some countries but not others? Have they given up trying because of particular difficulties, or have they just got bored with it and turned to what they consider to be, more pressing matters at home?

Good luck to the campaign.

jinglbellsfrocks Fri 13-Feb-15 10:45:12

Would add, I would have gone anyway if that had been my life choice.

Soutra Fri 13-Feb-15 10:56:23

I am not unsympathetic and think a pension is a pension is a pension and as it is not taxed at source should be paid the same whatever or wherever one lives. But this lady did not move did she? So her pension wasn't frozen and many grandparents do not live near their DC and DGC so her situation is not unique. Is it not perhaps overstating it to say she " sacrifices a social life"?

Anya Fri 13-Feb-15 11:08:14

I do sympathise as she must be very lonely now she is widowed. I think I'd have taken the plunge had this been my only child. Perhaps it's not too late for her to go still?

jinglbellsfrocks Fri 13-Feb-15 12:13:36

absent says she probably get in to Australia now. sad

jinglbellsfrocks Fri 13-Feb-15 12:15:01

Probably couldn't. hmm

(must get off here and make a birthday cake! And then wrap pressies)

mollie65 Fri 13-Feb-15 12:29:01

the official line : from government website:

We pay the UK State Pension worldwide. However, you will only get an increase every year if you live in:

the European Economic Area (EEA), Gibraltar or Switzerland
a country that has a social security agreement with the UK that allows for cost of living increases to the State Pension
so not necessarily arbitrary - just confusing and because it is an agreement it has to be ended/amended by both parties. hmm

mollie65 Fri 13-Feb-15 12:30:49

so I assume that pensioners moving from Australia or Canada would be similarly treated

J52 Fri 13-Feb-15 12:59:29

Do you think that if OZ is allowed to join in the Eurovision Song Contest, the situation might change? smile x

jinglbellsfrocks Fri 13-Feb-15 13:03:26

God save us! grin

Ana Fri 13-Feb-15 13:13:22

It's true!

www.theguardian.com/commentisfree/2015/feb/10/australia-eurovision-song-contest-europe

Anya Fri 13-Feb-15 13:22:23

They'd have to change the name surely?

Morgeo Fri 13-Feb-15 16:05:50

Many of those making comments fail to see or address the obvious discrimination that this government policy imposes. Why should a pensioner get the uprated pension in Macedonia but not in Malaysia. Why should they get uprated in the Philippines but not in the Falklands. Her personal situation really has nothing to do with this continued injustice perpetrated against a minority of pensioners around the world in the 21st century where democracy and justice should prevail and not poverty and discrimination.

granjura Fri 13-Feb-15 16:11:26

I have no checked this, but perhaps it is because of reciprocal arrangements. Do Australians for instance, pay full pensions to retirees from Australia living in the UK? If Australia, for instance, has refused to sign reciprocal arrangements with the UK- it is not the pensioners fault, but it is understandable.

Should the UK ever leave the European Unions, these arrangements will come to an end and put 1000s of retirees living in Europe in the same boat.

As said before, pensions go up in such tiny increments- it would hardly make a big difference to the OP - whereas fluctuations in exchange rates can make or break people, big time.

RobtheFox Fri 13-Feb-15 16:39:35

No mollie 65 - while the extract from the government website you quote is correct in that uprating only takes place in countries where there is such an agreement the DWP has confirmed in an FOI that there ıs no need for a reciprocal agreement at all in order for the UK to uprate; it is purely a domestic issue and index linkıng could be implemented world wide unilaterally if the UK government so wished.

RobtheFox Fri 13-Feb-15 17:02:55

Granjura - When I retired I was living in a frozen country. I moved after five years to an unfrozen one (not the UK) and my State Retirement Pension increased by GBP28.39 per week. That averages out at a loss of over three hundred pounds per year - these tiny increments add up!
As regards the exchange rates these apply just as much to the frozen pensioner as anyone else...a double hit.

As regards reciprocal agreements as I have pointed out to mollie65 they are quite unnecessary...and it is the UK that refuses to agree them, has done so for thirty years and states that it has no intention of doing so in the future. Australia actually tore up an agreement in 2000 because it did not include uprating and Canada was denied a full agreement back in 1979 having amended its Social Security arrangements and legislation to accomodate the demands made three years previously by the UK government...

RobtheFox Fri 13-Feb-15 17:17:37

Ana - in fifteen years of correspondıng wıth International Pensions, HMRC and DWP both prior to emigrating and after emigration but before retirement not a word about freezing even though they were aware of the country. I was warned from an unofficial source but the only official notification was included with my first payment.

durhamjen Fri 13-Feb-15 17:24:22

A couple I know were in a similar situation to Rita. They went out to Australia and lived there near their son for a couple of years, but the wife did not settle, so they came back to England.
A couple of years later she died, so he went out to Australia with his son straight after the funeral. He then sold his house and lived with his son and family, and is really enjoying his life.
I've never heard any complaints about the pension situation. I think he only thinks of the good things.

mrsmopp Fri 13-Feb-15 17:39:30

On the other hand, you can still get the winter fuel allowance after you live abroad, even if you move somewhere hot!

rosequartz Fri 13-Feb-15 17:46:59

It is unfair and there is no reciprocal arrangement, as we found out when we considered moving there.
It seems strange, particularly when UK pensioners in Europe receive the increases, the fuel allowance that UK pensioners living in Commonwealth countries have their pensions frozen at the amount it was when they left.
Yet another example of the abandonment of the Commonwealth in favour of Europe.

Is the average state pension £150? Well mine certainly isn't, and if Rita had emigrated in 2002 her pension would have been frozen at the 2002 level.
I am puzzled why she was paying NI until she was 67 - even if she worked until 67 she would not have paid NI after the age of 60 (in 1996)

The fluctuation of the exchange rate is definitely something to be taken into consideration too, as you could emigrate and think you would have a reasonable amount to live on then find your income is practically halved.

We could not possibly live in Australia on our state pensions even when the exchange rate was $A2.4 to the £1, which is what in about 2001/2.

However, I agree that this is an anomoly which should be looked at again.

mollie65 Fri 13-Feb-15 18:11:06

a court case under the Human rights act in 2005 (?) found for the government
the treatment of pensioners in Europe is due to our membership of the EU and the other reciprocal agreements are historical I believe.

flogging a dead horse comes to mind - decisions made by governments of all stripes can be arbitrary but one has to accept the situation sometimes as the luck of the draw.

I think the 'average' state pension because of Serps is around £150

durhamjen I agree with the people you know who accepted the situation and just got on with their lives - life is too short to worry about money if you have 'enough' and family time is the most precious thing.

granjura Fri 13-Feb-15 18:19:14

BTW - 150 a week? I wish!?! Where do you get that figure from- and that is the 'average'?

pompa Fri 13-Feb-15 19:02:59

Serps + graduated pension adds a big chunk to my pension and brings our average over the £150, and I contracted out of serps longer than I should have. So I would think an average of £150 is about right.

I am very glad we also have a company pension.

Goldbeater1 Fri 13-Feb-15 19:08:36

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

This is nonsense. There is a route into permenant residence for parents of Australian residents, whatever their age, provided they a) are fit and healthy b) don't have a police record and c) have more of their children living in Australia than elsewhere. After that its a question of a) waiting in a queue for about ten years, or b) coughing up an extraordinary amount of money to get fast tracked and be there in about two years. The current cost of fast tracking is about fifty thousand pounds for a couple.

None of this has anything to do with freezing the state pension however. I paid into my state pension right from my first Saturday job at fifteen and I expect to get the same treatment as everyone else. Daft, I know.