Expats call for fairer pension payouts
Half of pensioners abroad have had their pension frozen. That’s not right, they say
Personal Finance Editor
Friday 14 June 2013
Anger is growing among hundreds of thousands of British pensioners living abroad who are being denied their full state pension simply because of the country they live in.
Many have contacted us in recent weeks to complain about being treated like second-class citizens, only because of where they’ve chosen to live abroad. The problem is believed to affect around 565,000 UK pensioners who have had their pension frozen at the rate it was when they left the UK.
The state pension is guaranteed to rise each year, giving pensioners a small increase every 12 months. Of the 12 million people who receive the state pension, 1.2 million live abroad. It is among the latter group that a huge inequality has developed.
Those who have retired to the EU or more than 20 other countries – including the United States and Mauritius – see their state pension increased each year. But anyone who has moved to countries such as Australia, Canada, South Africa and a 100 more places has their pension frozen at the rate it was paid when they leave the country.
“A pensioner in one country is treated worse to one living in another country or in the UK,” points out Clive Walford who lives in Australia. “That clearly is discrimination.”
It means that 650,000 pensioners living abroad enjoy an increase in their retirement every year while 565,000 have to cope with what they were paid when they moved abroad.
For example, a man retiring at 65 in 1986 would have received a state pension of £38.70. If he had then moved to Canada he would still be getting the same £38.70. But if he had moved just across the border to the US he would today be getting £110.15, the same amount as UK-based pensioners get.
“Pensioners have been fighting for many years to get the frozen pension policy revoked,” points out Mr Walford. “The courts have in some cases agreed that frozen pensions were immoral or dishonourable but have had to finally judge that they are not illegal.
“MPs and others have also condemned it as illogical and unacceptable. Lord Goddard QC even called the state pension system a virtual contract – you get out pro-rata what you paid in. Therefore frozen pensions break that virtual contract.”
His argument – along with half a million other pensioners – is simple. All 1.2 million expat pensioners paid into the system, but more than half are getting a lot more out. That is simply unfair.
There was hope this week that the Canadian Prime Minister, Stephen Harper, would implore David Cameron to support the uprating of state pensions for the 1560,000 expat pensioners living in Canada when the two premiers met.
But the International Consortium of British Pensioners is increasing demands for parity for all. The Government says doing so would cost £650m which it can’t afford, but research shows that uprating pensions according to age tiers could be much more affordable. John Markham, of the Consortium said: “Age tiering is an affordable, workable and fair solution to this ongoing travesty.”
You can find out more about the situation at pensionjustice.org
Tax change lays foundation for self-build boom in UK
Dirty tricks in a divorce can cause some nasty surprises
Simon Read: Frozen in time - the expat British pensioners who deserve a better deal
Pension firms must ask consumers more questions, says City Watchdog
Number of serially under-performing investment funds has increased by a fifth, survey reveals
- 2 Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
- 3 Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
- 4 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 5 Isis publicly behead man in Syrian town square for 'insulting Allah' as he screams for help
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
9 reasons Greece's experiment with the radical left is doomed to failure
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village