Expatriate British Pensions Update May 2017

The 20 April House of Commons debate raised many of the points Sir Roger Gale and his All Party Parliamentary Group (APPG) have so ably made in the past and the unfreezing of the relevant pensions was supported by various MPs from all parties. Many examples of individual hardship were mentioned together with the apparent arbitrariness of the rules and issues of morality. Partial uprating (receiving increases from now on) appeared the objective, rather than full retrospective uprating. The minister made the point that partial uprating becomes full uprating eventually. Even partial uprating seems very hard on those likely to be suffering the most – pensioners of 20 or more years standing. Governments’ views always seem to have been that the rules are of longstanding and it is up to individuals to make appropriate decisions within those rules. Mention was made of the Brexit negotiations and the position of UK pensioners in the EU, with the suggestion that “Surely now, in the light of Brexit, is the time at least to start to put all expat UK pensioners who have paid their dues on an equal footing.” One member made the comment that he was passionately pushing this cause even though (by definition) he was not doing this to represent any of his constituents. “They are disenfranchised and are not represented.”

Some of the more relevant comments are attached below from this 1¾ hour debate:

House of Commons Hansard

State Pensions: UK Expatriates

20 April 2017

Volume 624

Sir Roger Gale (North Thanet) (Con)

“I beg to move,

“That this House notes the detrimental effect that the Social Security Benefits Up-rating Regulations 2017 will have on the lives of many expatriate UK citizens living overseas with frozen pensions; and insists that the Government take the necessary steps to withdraw those Regulations.”

The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)

“The state pension is paid to people who are entitled to it when they leave the country, but increased—“uprated” is the expression in this context—abroad every year only when the recipient is in certain areas: in the European economic area, Switzerland, or a country with which ​the UK has a specific reciprocal agreement that allows for uprating. This is a long-standing policy that has remained consistent for about 70 years, and, as has been said, it has been the policy of consecutive Governments of all persuasions.”

He later said:

“Several contributors, including my hon. Friend, said that because all workers pay their national insurance contributions towards their state pension there is a moral right that they should receive an uprated state pension wherever they live. Moral rights are very subjective, but I know exactly what was meant. However, the rate of contribution paid has never earned entitlement to the indexation of pensions payable abroad. That reflects the fact that the scheme overall is primarily designed for those living in the UK, and it operates on a pay-as-you-go ​basis. Contributions paid into the fund in any one year contribute to the expenditure in that year. That is the way that public finance works. The contributions provide a foundation for calculating the benefits, but they do not pay for those benefits.”

and:

“Those who are eligible for a UK state pension can have their pension paid wherever they choose to live. The rules governing the uprating of pensions are straightforward, widely publicised and have been the same for many years. The Government’s position remains consistent with that of every Government for the past 70 years. The annual costs of changing the long-standing policy will soon be an extra £500 million, which the Government believe cannot be justified.”

Question put and agreed to.

Resolved,

That this House notes the detrimental effect that the Social Security Benefits Up-rating Regulations 2017 will have on the lives of many expatriate UK citizens living overseas with frozen pensions; and insists that the Government take the necessary steps to withdraw those Regulations.

Following this debate, and the announcement of a general election, the APPG appealed to all eligible British citizens living overseas to register to vote. British citizens abroad can register as an overseas voter for up to 15 years after leaving the UK, as long as they were registered to vote within the previous 15 years or, if they were too young to register, when they left the UK.

Parliament was dissolved on 3 May from which point there were no MPs and accordingly no APPGs. An APPG, or those who composed it, are prohibited from undertaking any form of activity related to the APPG, such as issuing any communication or undertaking research, while Parliament is dissolved. Prior to its loss of status the APPG expressed the opinion that the APPG would be re-formed after the election. Its website will not be taken down but the content has to be viewed as historic.

550,000 British Pensioners, 4% of all recipients of the State Pension and half the pensioners living overseas, are currently adversely affected by the government’s frozen pension policy.

Sources: Hansard; APPG on Frozen British Pensions.

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