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
Mark Dampier: Don't panic. Canny investors sit tight when the stock market falls
Shareholders can hold a company to account
Derek Pain: Dividends ease the suffering in a moribund stock market
Questions of Cash: Payment woes with Barclays overshadow Cornish holiday
Bank-beating exchange rates on your international payments
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Tony Blair 'says Ed Miliband will lose 2015 general election'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Putin: The US is to blame for almost all the world's major conflicts
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
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
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village