Expatriate British Pensions Update February 2018

The draft Social Security Benefits Up-rating Order 2018 was debated by the Commons on 5  February. The Parliamentary Under-Secretary of State for Work and Pensions (Kit Malthouse) confirmed the commitment to the triple lock guarantee for the duration of the present parliament allowing a 3% increase in the state pension. This takes it to £125.95 per week, or 18.56% of average earnings, its highest for two decades. In 2016, the Government introduced the new state pension for people reaching their state pension age from 6 April 2016 onwards. The full rate of the new state pension will increase by 3% this year, meaning that, from April 2018, the full rate of this new state pension will increase by £4.80 to £164.35 a week —around 24.2% of average earnings.

While expats tend to think in terms of the state pension there are a host of other benefits, some of which are covered by the government’s austerity programme while others are not. As Debbie Abrahams (Lab) pointed out “The uprating order provides for the annual uprating of social security entitlements excluded from the Government’s freeze to levels of social security enacted in the Welfare Reform and Work Act 2016. As we have heard, that includes attendance allowance, carer’s allowance, ​disability living allowance, personal independence payment, industrial injuries disablement benefit, bereavement benefits, incapacity benefit and severe disablement allowance.” On the other hand, as she went on to say “The uprating order does not include child benefit, jobseeker’s allowance, employment and support allowance, income support, housing benefit, local housing allowance rates, child tax credit, working tax credit and the majority of comparable elements of universal credit.”

There was quite a lively debate though almost entirely devoted to topics which will generally not have been followed to any extent by expats – the amounts going into this fairly new universal credit system which replaces some benefits and tax credits, scrapping the severe disability premium, limiting child tax credit support to two children and wider topics such as the increasing income gap between the richest and poorest in society.

Abrahams was the first to raise the frozen pension issue. Her main contribution in this regard reads as follows:

“Although the state pension is being uprated, people who have frozen pensions are excluded from the uprating and will not see an increase in their state pension in line with inflation. Pensioners living abroad face very different circumstances depending on whether their country of residence has a reciprocal agreement with the UK for the uprating of state pensions. Pensioners in countries without this arrangement see their pensions frozen at their initial retirement level, which means that the value of their pension falls in real terms every single year.

“More than half a million people currently have their pensions frozen, mostly in Commonwealth countries such as India, Australia, Canada, parts of the Caribbean and New Zealand, and in countries with strong family and historical links to the UK such as Pakistan and parts of Africa. The Opposition believe that their pensions should be protected in the same way that the pensions of other UK citizens living abroad are in the future, yet the Government are choosing to withhold the pension uprating in this order from 550,000 recipients living outside the UK. This is a chance for the Government to make an historic change to our pension system and support our policy to end future arbitrary discrimination against some British pensioners living overseas by uprating in line with inflation from this point. Will the Minister look again at that issue and take action to address that inequality?”

This was supported in a similar vein by Neil Gray (SNP) including “It is an injustice that some people, who have earned the right to their pension like everyone else, have their payments frozen at the rate they first received for the rest of their life abroad. It is just not right that the pensions of those who live in some countries continue to rise while those of others are frozen. Some 550,000 British pensioners are affected, who represent 4% of all recipients of the state pension and half of all those drawing their pensions abroad.”

These comments were however the exception and occupied possibly three or four minutes of the roughly 90 minute debate. It will be interesting to see to what extent the post Brexit position of EU expats influences all of this.

Source: Hansard

Advertisements

27 thoughts on “Expatriate British Pensions Update February 2018

    1. The decision has not been taken yet with regard to the annual increase. The debate earlier this month was just setting out what the increases will be. In March or early April, the Government will present to Statutory Instruments (SIs)which are used to enshrine the annual increase into law. The first SI gives all pensioners everywhere the annual triple lock increase. This is quickly followed up by the second SI that takes the increase away from pensioners living in countries where there is no legal obligation on the government to pay out the increase. This means us. This is the legal document that takes our increases away. The only way to stop this is for our supporting MPs to raise what is called an Early Day Motion (EDM). This EDM will “pray” against the second of the two SIs i.e. the one that is taking away our annual increase. We then ask MPs to sign the EDM indicating that they are opposing the second of the two SIs. Less than 100 of these EDM’s have received 300 signatures or more. We would like the EDM that will shortly be raised to get over 300 signatures. The Labour Party has included Pension unfreezing in their Party Manifesto; the SNP Party always vote en-bloc on issues, and they have been very supportive. We have a number of supporters in the Conservative and DUP, but we need your help – please, please ask all of your friends in the UK to write to their MP, because this has more effect than anything else. We know, from talking to MPs face to face, they tell us that they react mostly based on what their constituents tell them. If you would like a “model” letter, please cut and paste the following:

      “Dear Mr/Mrs/Ms ,

      I am writing to you today on a Parliamentary issue rather than a Constituency one, and to ask you to please pray against the Statutory Instrument that would remove the 2018 annual uprating for State Pensioners living in certain countries, when it is laid before Parliament in March or early April.

      To freeze the pensions of people who retire to certain countries while giving annual increases to those who have moved to other countries is discrimination. Both groups earned their pensions in exactly the same way, each fulfilling their side of the contributory scheme, mainly through mandatory National Insurance premiums while working in Britain and contributing to Britain’s wellbeing.

      In light of the Government’s decision to uprate pensions in every EU country following Brexit, including where there is no legal requirement to do so, it is shameful that they would continue to mistreat pensioners who live predominantly in the Commonwealth.

      The policy is indefensible. In 2010, six judges at the European Court of Human Rights concluded that “(There exists) no justification for subjecting pensioners who choose not to live in the UK to extremely unfavourable and unequal treatment in comparison with those who do.

      As one of your constituents, you are my direct link to the democracy that we enjoy and I am asking you to please oppose this insanity by supporting the prayer against the Statutory Instrument when it is laid before Parliament.

      I will be checking the roster of supporters and hoping to see your name included there Yours respectfully, etc “

      Like

  1. My late husband and I emigrated to South Africa from London in 1969 . Two years later we were visiting family in London and decided to make arrangements to start paying from South Africa in order to qualify for a full pension . We were not advised then that our pension would be frozen!!!! and we continued paying every year until my husband reached his retirement age. My older sister was living in London had her rent paid for, a carer 4 times a week and and and. I have to pay for my own Medical Aid etc . !!!!

    Like

  2. Inequality, Discriminatory & Injustice to All the British Pensioners who have paid their dues and not get the increase because they chose to live somewhere else.

    Like

  3. This immoral and discriminatory practice has to come to an end. How can it be fair that, if you live south of the Niagara Falls (in the USA) you receive the annual increase, but if you live north of the Falls (in Canada) you don’t? This isn’t right. Many of the current frozen pensioners fought for their country, and this is the way that they are treated. Over 500,000 of the frozen pensioners live in Commonwealth countries. In the Commonwealth Charter it is very clear “We are implacably opposed to all forms of discrimination, whether rooted in gender, race, colour, creed, political belief or other grounds.”Mar 11, 2013. Sadly, the Charter has no place in the UK’s legal framework.

    Liked by 1 person

  4. Comments have already been made about the totally illogical, irrational and discriminatory frozen pension policy; it is an indictment of successive governments for nigh on seventy years and longevity is no justification.
    I am however a little concerned about Debbie Adams phrase “….and support our (Labour) policy to end future arbitrary discrimination against some British pensioners living overseas by uprating in line with inflation from this point on.” Does she mean establishing parity by bringing all the current frozen pensioners in line wıth EU resident pensioners and then ımplementing the annual uprating across the board – ie full uprating – and which is the International Consortium of British Pensioners standpoint, or is ıt what has been termed partial uprating by simply addding the annual index link increase to the frozen pensioners reduced income? Partial uprating simply condones the dıscrimination, exacerbates the problems and is really not acceptable or a realistic way forward.

    Liked by 1 person

  5. “Pensioners living abroad face very different circumstances depending on whether their country of residence has a reciprocal agreement with the UK for the uprating of state pensions.” Regarding reciprocal agreements, this well worn excuse is trotted out by the DWP and in most articles about the frozen pension scandal, but in a FOI request made to the DWP a couple of years ago they admitted no such agreements are needed as the paying of pensions is a domestic matter. It is used to try to deflect the deliberate and blatant discrimination inflicted on the 4% who are victims of this injustice away from the UK government by implying it’s the fault of the country where British pensioners are living. Another well worn excuse used for decades also is “the government have no plans to uprate any other expat pensioners who live overseas” but in fact they have done just that with another 27 countries as part of Brexit! To say those in high places, whether they be politicians, ministers or the treasury officials are hypocrites and liars is an understatement.

    All recipients of a state pension have paid their NI contributions on the same terms as everyone else who receives the pension, where one lives in retirement is irrelevant. Shame on the UK government who for decades has stolen cost of living increases from their own seniors.

    Liked by 2 people

  6. This disgusts me as an aged pensioner living in Australia, who continued to pay NI contributions not realising that it would make no difference. My pension is frozen, how can the Goverment think it is okay to discriminate against its own?

    Liked by 2 people

  7. Since January 2017, I have lost even more of my monthly British Pension, and I don’t know why. The frozen amount use supposed tow be $380.00 per month. It is only a part-pension as I only worked one UK for 10 years all up. Even so, I have not received that amount for a long time. Up until January 2017, I was getting $340.00 per month, then Ute suddenly plunged to $256.00 per month!! And has not changed, except, at the moment it is $276.00 per month. I am really angry about this. Is it because of the Brexit problem? This is a loss of between $64 – $84 per month, plus I don’t get any pension raises when they occur. And this doesn’t include the other $40 a month I was getting a few years back.

    Like

    1. Presumably you have questioned the apparent reductions in your State Pension with the Pensions Service in the UK? Because your pension is frozen the amount (in sterling) should not vary and be the same as when it was fırst paid in your frozen country. Fluctuations in the exchange rates may affect the amount in dollars going into the bank. Brexit, itself has nothing to do with it directly.

      Like

  8. The manner in which the UK government treats some pensioners is completely unjust. We all paid at the same rate for our pensions however the sum we receive is determined by our country of residence, how is this reasonable? In any other transaction it would be considered to be theft. What is as appalling is the fact that HMG obviously believes it is OK to have their cash strapped pensioners bailed out (if they are lucky) by the tax payers of other countries – mostly Commonwealth countries. Sooner or later the Commonwealth HoG are going to bring the UK to task particularly given the likely parlous state of UK trade post Brexit.

    Liked by 1 person

  9. I find it unbelievable that this government can blatantly continue this outdated completely now unjustifiable, policy. The excuses for not uprating? 1) Cant afford it, 2) No reciprocal agreements and 3) we only uprate where legally required to.
    The government Audit say the calculated income from contributions will be greater than expenditure 2018-19 for the NIS fund required balance. To the tune of £2.2 billion. The government has not had to make a payment and will not have to for the next 3 years at least.
    1) https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/january2018 tells us there are 32.21 million people in work, an increase again. So more income to the funds. A small increase in contributions of 50P a month would bring in £192,000,000. Cant afford it? Humbug. Stop spending fund money on non-pension fund requirements. Stick to what it was intended for.
    2) Reciprocal AGREEMENTS ARE NOT REQUIRED FOR DOMESTIC LEGISLATION. The DSS said in 1966, the Pension Minister said it in2011, the F of I said it in 2012. The APPG said it in 2017. The PM has now changed her tune. She now drops the word “Reciprocal” and just says agreement with the EU to continue uprating in the future for EU pensioners. Any agreement would not override the Pension Acts. (There are RAs with Canada and New Zealand but their pensions are frozen! )
    3) The pension Act does not state overseas pensions must be frozen. It says a SI MAY be made to withhold all or some uprating. A negative procedure slipped in and most MPs are not aware it has been tabled.
    To get rid of the FP policy, uprate all pensioners to the current rate is not a massive task. Every party other the Con Party should pull in a 3 line whip, demand a vote, and demand its done now. Con party members that support the unfreezing, (and there is quite a few), can oppose the policy and speak in the Commons against it. For Gods sake after 70 years is not about time we has some real action?

    Like

  10. I live in Australia and like many others, continued to make N.I. contributions to ensure I would get the maximum eligible pension when I reached retirement age. In all the phone calls and letters that I exchanged during that time with the UK pensions department I was never told that it would be frozen. It was not until I got the final letter when I became eligible informing me of the amount I would be paid that I read, buried in a wordy paragraph somewhere a few pages into the document, something that suggested it would never be uprated. I immediately rang them for clarification, hoping I had just misunderstood some government gobble-de-gook, but no, it was confirmed, my pension would never be uprated as long as I remained in Australia. I expressed my dismay and disgust at this discrimination and that I had not been told all those years I was paying in. Not that it did me any good. I joined BPiA (British Pensioners in Australia) headed up by the indefatigable Jim Tilley who will be fighting this until his last breath, and regularly write to MPs but it hasn’t done any good so far. This situation is discriminatory, unfair, and unconscionable.

    Liked by 1 person

  11. The Shadow Secretary of State for Work and Pensions, Debbie Abrahams, must be aware that RAs are not actually required to uprate pensions and surely she could emphasise that in forcing the frozen pension policy to be eliminated now. This point should have been raised. RAs or not everyone is entitled to a pension only dependent on their contributory years. RAs are irrelevant as they are not an essential part of uprating.

    Like

    1. As almost all the other commentators have written, this outrageous British pension policy is unfair, blatant age discrimination and therefore in breach of the House of Commons Code of Conduct item 5 and the Commonwealth Charter, which the UK Government seems to dismiss as merely an aspiration. Well let’s see how the Commonwealth Heads of Government Meeting sees this nauseating British attitude to the Royal Charter, when they meet in April this year?

      Like

      1. The next few months are crucial. In the UK Parliament, let us hope that our MP supporters can successfully “pray” against the Statutory Instrument that denies us the annual increase. If this does not work, then let’s pray ourselves that CHOGM can shame the British Government into giving us our pension increases. I know that we have asked people to lobby (write to) the MP in their last constituency and again we are asking not only readers of this reply, but please, please ask all of your friends in the UK to write to their MP, because this has more effect than anything else. We know, from talking to MPs face to face, they tell us that they react mostly based on what their constituents tell them. If you would like a “model” letter, please cut and paste the following:
        “Dear Mr/Mrs/Ms ,
        I am writing to you today on a Parliamentary issue rather than a Constituency one, and to ask you to please pray against the Statutory Instrument that would remove the 2018 annual uprating for State Pensioners living in certain countries, when it is laid before Parliament in March or early April.

        To freeze the pensions of people who retire to certain countries while giving annual increases to those who have moved to other countries is discrimination. Both groups earned their pensions in exactly the same way, each fulfilling their side of the contributory scheme, mainly through mandatory National Insurance premiums while working in Britain and contributing to Britain’s wellbeing.

        In light of the Government’s decision to uprate pensions in every EU country following Brexit, including where there is no legal requirement to do so, it is shameful that they would continue to mistreat pensioners who live predominantly in the Commonwealth.

        The policy is indefensible. In 2010, six judges at the European Court of Human Rights concluded that “(There exists) no justification for subjecting pensioners who choose not to live in the UK to extremely unfavourable and unequal treatment in comparison with those who do.

        As one of your constituents, you are my direct link to the democracy that we enjoy and I am asking you to please oppose this insanity by supporting the prayer against the Statutory Instrument when it is laid before Parliament.

        I will be checking the roster of supporters and hoping to see your name included there Yours respectfully, etc “

        Like

  12. I am indebted to you all for these comments which have rather eclipsed the original post!. My object was to try to set out, dispassionately, the proceedings in this debate but as a frozen pensioner in South Africa I relate to all these comments. To RobTheFox I can only say that I think Debbie Abrahams was referring to partial and not full uprating which rather takes the shine off Labour’s commitment to equity.

    Like

    1. Thank you for the original blog which has given us all the opportunity to contribute. Once we know the Early Day Motion that has been filed, then we can exhort all of our friends and family in the UK to write/email their MP. Perhaps you can post another blog then, using something like the model letter I posted earlier.

      Thank again for the blog…..

      Like

    2. Thank you for your reply – I was afraid that you would say that and, in my view, partial uprating is not the solution and would leave the government with the “it wıll resolve itself over time” get out clause and meanwhile those more senior pensioners on say £20 per week would only get a few pence.
      Thanks for blogging the issue. I see I called her Debbie Adams rather than Abrahams – whoops!

      Like

  13. Its not going to happen not in one hit we need to take partial , accept an increase on you present frozen amount and keep trying for full parity, do I need to remind you this will make us 3% behind and as each year goes by the sum gets bigger and consequently more difficult for the chancellor to digest.

    Like

    1. The real Governent fear is that if they give full uprating it will look like they are admitting a mistake and righting a wrong. This would leave the door open to being sued for all of the backpay, which would run into billions. Partial uprating allows them to draw a line in the sand, without admitting previous mistakes – they can easily say that because of Brexit, they are implementing reciprocal agreements with all of the EU countries, and therefore it is time to unfreeze Pensions everywhere. Whilst we all hate this option, what it does do is protect the next generation of pensioners as they would get the Annual increase wherever they choose to retire to. Not palatable to those who are in their ‘80’s or ‘90’s who need the money the most as this is probably the only pension they are receiving. Nobody likes this deal, but it is difficult to see how any other option is feasible on any level.

      Like

  14. I cannot see why partial uprating will not cause some to challenge for back pay, whereas pension parity might. That is not logical; in fact partial uprating will probably bring about even more frozen pensioners demanding full back pay, being disgusted with the pathetic partial solution. I partial is a dud. Parity should be our compromise solution.

    Like

  15. Any thoughts on this ?
    I was a deferred pensioner in a company scheme that was underfunded . In order to protect the guaranteed minimum pensions of deferred pensioners the fund managers paid an accrued rights premium on behalf of each individal to the Sec of State at DWP.

    i believe at this point a contract was formed between each member and the DWP. Put simply this amounted to agree terms , pay premium, receive index linked state pension (SERPS). The calculation of the premium amount would have been made using govt actuaries tables and would have needed to factor in indexation. The DWP Now wants to stop my annual increases because I live in Australia. Clearly if a commercial Insurer had pulled a stroke like this they would be in breach of contract. Are the DWP above the law ? Or do they owe me some money ?

    George Baddeley (W.Australia).

    Like

  16. Hi George, I have no special knowledge or experience that qualifies me to provide the answer you deserve especially as I emigrated from UK over 40 years ago. If you were in a defined benefit scheme that was underfunded the normal practice would be for the employer to top that scheme up. Were you UK resident working for a UK company when this arrangement was made? It does sound a rather unusual arrangement and the prospect of one of the participants moving to a ‘frozen’ country was possibly not envisaged at the time. You make the contract sound very specific between each member and DWP such that a legal interpretation of the contract appears required but from what you say increases were factored in lading to the presumption that these would be granted. To stop the increases sounds as arbitrary as it is for the rest of us in affected countries except you may have a better legal claim.

    Like

  17. HI,
    Can clarify my last post,I was employed at this time by a UK company which was insovent and ceasing to trade hence the need for reinstatement into state scheme . Provision of an index linked annuity which would
    have paid increases was an alternative option for fund managers to provide. This would still be paid if I were living on the moon !
    Each individals premium was separately calculated because each had differing circumstances.
    The main question that arises is whether the British parliament can put the Sec of State at DWP In a position to ignore common law of contract.

    George Baddeley
    W Australia

    Like

    1. Indeed it’s a sad day if Parliament, sovereign or not, can overturn or nullify a contract such as this. It seems as bad or worse than retrospective legislation. How can any contract with government be entered into if it may not be honoured I hope you might get a more authoritative (and favourable) legal opinion than I can give!.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s