Gransnet forums

Legal, pensions and money

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

Morgeo Fri 13-Feb-15 20:00:09

mollie65, the ECHR found that the UK were acting in line with their law but not that this was acceptable treatment.
Discrimination is not allowed in the EU hence the uprating of UK pensions when a country joins them.
If Australia could join the EU the UK would have to uprate their pensions.
The reference to the ECHR finding is therefore misleading and irrelevant when quoted by the DWP. Lies and deceit from the government like the need for reciprocal agreements.
The luck of the draw has nothing to do in this situation as it is plain theft of the indexation without any justification as ALL pensioners paid into the system in the same way and ALL should withdraw in retirement in the same way. No if's or but's ! It's as simple as that !

Morgeo Fri 13-Feb-15 20:12:51

rosequartz, you said : "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".
What you have said is true but the bottom line is that the government should treat all pensioners fairly and equally with respect to their pensions and the country of retirement, the exchange rate, the weather or anything else is totally irrelevant

Goldbeater1 Fri 13-Feb-15 20:20:53

Actually, even if the government of the UK did give pensioners in (say) Australia the same cost of living upgrades as those living in the UK, they would still be getting off lightly, since those who live in Australia are not going to have increasing need of social services and the NHS as they get older.

I agree with those who say that it would be difficult to settle anywhere and hope to live on the UK state pension. However, the UK state pension may well make a substantial difference to the overall standard of living of a retired couple. Furthermore, those cost of living increases do make a difference. It has been calculated that a pensioner emigrating to Australia in 1985 would now be receiving approximately 54 pounds a week - against the current amount of 118 pounds. To add insult to injury, many of that generation not only suffered through WW2 but also paid contributions for 40 years or more to get their full pension.

One final piece of lunacy is that if a pensioner living in (say) Australia returns to the UK for a holiday, they are entitled to receive the full current state pension during the period they stay here - then when they return to their country of residence the pension reverts to its former lower level. How much does that cost to administer, I wonder?

Possiejim Fri 13-Feb-15 23:04:17

I am absolutely in support of Rita. What all previous UK governments have been doing in this immoral practice of theirs is to ignore the adverse consequences of the policy based on Britain's struggle after WW2 to save sending money overseas.
That situation has now changed, so much so that even now the present government is committed to send more than Pds12 Billion in overseas foreign aid, much of it to corrupt foreign governments. So to keep saying that there is a law which enables them to freeze some, just 4%, of the UK's pensioners' pensions, is an absolute disgrace from a nation, which supposedly boasts of its core values of fairness, equality and non discrimination.
These values it tries to export to the rest of the world through its international diplomacy and yet by freezing a few of its pensioners pensions it fails to see this practice is contrary to the message it tries to sell to other nations.
Britain is the only OECD country with this draconian pension practice and the International Consortium of British pensioners is campaigning to have it removed from the statute books. Please read this article;- www.maturetimes.co.uk/join-fight-end-pension-discrimination/

As one MP said, in another recent article published about this appalling short-sighted policy, "The frozen pension policy is economic foolishness". This is because it fails to recognise that it is discouraging increasing thousands from leaving the UK to retire overseas, especially many from the black and ethnic minorities who by doing so will take pressure off the creaking national health and A&E services, save on winter power subsidies as well as free pensioners' prescriptions, free bus passes and free TV licences. These savings more than compensate the cost of indexing all pensions equally.
So please open your minds on this issue. It is one of practicing the core values of fairness and equality of which British people like to think they are proud but which their government foolishly and intransigently ignores in managing the UK's state pensions to which we all paid equally but a few of us are paid unequally.

That is not the expected British way.
Please visit www.pensionjustice.org and learn a lot more about this issue

absent Sat 14-Feb-15 04:46:21

J52 I don't know much about retirees applying for residency in Australia – just that it's very difficult to obtain. Mind you, we had to jump through a fair number of hoops to get residency in New Zealand.

mollie65 Sat 14-Feb-15 07:02:14

thread overtaken by a pressure group - I'm out. hmm

Anya Sat 14-Feb-15 08:03:58

Yes, and hints of closet racism. Any sympathy I had is fast evaporating.

Soutra Sat 14-Feb-15 08:52:52

I don't know what " cost of living" increase would bring our state pension up to £54 per week. I wish I got over £200 per month. Yes I agree in principle but am bamboozled by figures which seem to bear little relation to my OAP in this country and by increasing verbiage.
The post about the relative costs of flights compared with "lost" pension increases makes sense to me. Can't really get worked up about this as any major travesty in the wider scheme of things.

Iam64 Sat 14-Feb-15 09:11:42

My pension is £120, the same figure as many of my friends. I paid into a work pension so am ok but how do others get £150?
I object to someone linking pension payments with overseas aid, as has already been said it sounds like closet racism.

pompa Sat 14-Feb-15 09:41:42

SERPS and Graduated pension form a large part of my pension, had I not contacted out for a while I guess my state pension would be over £200/wk.

I would point out that SERPS etc are not free, I had to pay a significant sum to get them. Like all pensions, you get out what you pay in. I have IMO a good company pension, but I did voluntarily pay in a much larger amount to enable me to comfortably retire early (57)

Contracting out enabled me to get a larger company pension (as it turns out I would have been better staying contracted in, but hindsight is wonderful)

hondagirl Sat 14-Feb-15 10:20:31

We move to Australia to be near our daughter and the visa itself cost quite a lot. We are finding it very expensive and we are fortunate enough to have some private pensions in addition to the state pension, but still find it a bit of a struggle.

In addition, if your income is in pounds, you are also at the mercy of the exchange rate. As soon as we came over here the exchange rate plummeted to 1.5 Oz dollars to the pound (having previously been around 2.2 when we first started planning this. This not only affect your monthly income, but also the budget for your house, as houses are not cheap here.

We do know of older Brits who are having to return to the UK as they can no longer afford to live here existing just on their frozen state pensions. However, it doesn't make sense to me not to unfreeze the pensions as surely the cost to the government in extra healthcare and social security etc is considerable.

Fortunately the exchange rate has recently improved to just below 2 dollars to the pound, but who knows what the future holds. It is this uncertainty as well as the frozen pension which is making us consider whether we can afford to stay here in the long term.

Soutra Sat 14-Feb-15 10:44:47

I sympathise hondagirl as you actually do find yourselves in the situation referred to in the thread title. However, the blog's author has not as I understand it emigrated, so her pension is not frozen!
Something just stops me from getting too worked up about a hypothetical situation, when there are other real issues to worry about.

Possiejim Sat 14-Feb-15 12:08:00

Anyone who wishes to help us frozen pension expats in our campaign for eventual fairness and justice are very welcome to contact our non-profit organisation British Pensions in Australia Inc, a founder member of the International Consortium, by visiting our website www.bpia.org.au or even by phoning me in Australia on 1300 308 353. I work on this issue from home to the south of Sydney.

Established in 2003 British Pensions in Australia (BPiA) is an 12,000 contributor, not for profit, volunteer association of British expats who are challenging the United Kingdom government’s unfair and discriminatory ‘frozen pension policy’. We are also willing to help members who have worked in the UK to investigate, enhance and even discover their possible UK pension entitlement.
BPiA works with the International Consortium of British Pensions (ICBP) in our campaign to have the UK Government repeal their unfair, unequal and discriminatory policy of freezing UK State pensions in many countries, including Australia and NZ.

soontobe Sat 14-Feb-15 12:20:05

Which posters are from a pressure group?
I am having trouble following the thread, so I would appreicate knowing who are not the usual posters.

Iam64 Sat 14-Feb-15 12:29:49

pompa - thanks for that, I expect that's why my state pension is not as high as others. I don't remember (sadly) but I expect I contracted out and I definitely paid more into my work pension. It was tough at the time but so glad I did it

rosequartz Sat 14-Feb-15 14:53:55

Morgeo I think if you re-read my post you will find that I agree with you that it is most unfair that pension increases are not paid to UK pensioners emigrating to certain countries. They have paid in and are now being discriminated against.

The thought about the exchange rate was just an addition that does need to be taken into consideration - in 2001 the exchange rate was A$2.4 to £1 sterling, about two years ago it was A£1.4 to £1 which, coupled with no state pension increases, makes for a considerable drop in income.
Another consideration is that UK pensioners do not pay NI but still have all the benefits of the NHS whereas health care in certain other countries is quite expensive.

MargaretX Sat 14-Feb-15 17:10:53

Our pensions continue to increase because we are in the EU! Typical for most people living in the UK they forget entirely what benefits we have by being in the EU. Europeans get the increases and they are paid by their governments as if they were living at home.

The EU does not have any such agreement with other countries.

As to health care its only the NHS which provides free health care for pensioners. That's why it is short of money. Every pensioner getting enough pension to pay tax should pay NI. or at least a percentage.

rosequartz Sat 14-Feb-15 17:44:11

I agree that we should pay a lower NI 'stamp' to help fund the NHS if we have a pension over a certain level.
Perhaps not at the level at which we start paying tax, which could cause hardship, but at an income above, say £25,000.

Ana Sat 14-Feb-15 17:50:01

Not sure how it could be guaranteed that any such payments would go directly to fund the NHS. NI contributions seem to get thrown into the general 'pot'.

rosequartz Sat 14-Feb-15 17:55:41

That's the problem with it, and pensioners would be grumbling that they are supporting the workshy.
It would have to be 'ringfenced' as they say, and would probably cost too much in administration to be worth it.

durhamjen Sat 14-Feb-15 18:22:34

Doesn't have to go into the general pot, Ana. Hypothecation is possible as they know who they pay pensions to, and how much we all get.

GrannyTwice Sat 14-Feb-15 18:27:01

I can't understand why it would be fair to pay NI on pensions and not on income from savings, investments etc.

Goldbeater1 Sat 14-Feb-15 18:49:31

Excuse me for interrupting the ramblings about whether or not we should pay NI on our pensions but this thread is about .or not the practice of 'freezing' state pensions is fair.

I would ask those who think this is not a real issue to imagine for a moment, that their only child has married an Australian and settled in Sydney. There is a grandchild on the way. Many grandparents in this situation would want to move closer to their Australian family. Imagine not being able to do so because losing the cost of living increases on the UK state pension would make it impossible to live comfortably in Australia. On the other hand, if the same couple wanted to go and live in the Philipines ... that would be okay, their pension would be upgraded each year.

Is this fair?

Soutra Sat 14-Feb-15 19:14:28

No and most of us have agreed with the inequality. But why should I imagine myself into a situation which common sense and basic sums dictate that it is not a decision I would take. I could however imagine that my DD and her 3 little ones had moved to Nova Scotia as my parents had to face 50 years ago when transatlantic travel was much less common than today and they could no way afford to visit their grandchildren . No Skype then just weekly airmail letters and occasional photographs. It was all too common in Scottish towns in those days to have at least one grown up child and their family in Canada, Australia or New Zealand. No expectation of grandparents. "Rights" in those days either.

rosequartz Sat 14-Feb-15 19:42:08

I don't have to imagine it, 'Goldbeater1*

And no, the pension situation is not fair. However, paying NI in the UK is a valid point in the discussion because those who elect to stay in the UK will get the benefit of the NHS and those who have emigrated have the additional burden of paying Medicare and then probably not being able to access the drugs they may need in their old age anyway.
Some of us may need drugs which are quite expensive and could not emigrate to be nearer to family because of that very reason.
We may also have to pay a huge health insurance premium which we may never need to use when we do visit, but probably that would be cost-effective in the long-term.
There are many on GN who have valid opinions on this subject, it is not just the prerogative of those who have already emigrated; some may not have done so for financial or other reasons.

It may seem like 'rambling' but it is part of the wider picture.