Expats call for fairer pension payouts

Half of pensioners abroad have had their pension frozen. That’s not right, they say

Personal Finance Editor

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

Independent Partners: 10 top tips for retirement. Get your free guide here

New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
News
news
PROMOTED VIDEO
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
tv
Life and Style
fashion
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all