Why on earth should it be a sad day? On this day around 11 million British state pensioners are due a 10.1% uplift in their state pensions. That is, all except some half a million living around the world who have been denied annual increases. This is due to the legacy of an unjust policy that was set in very different times over 70 years ago, but has since been maintained by successive governments to save money.
Lib Dems Overseas have been supporting a campaign for several years to ‘unfreeze’ these pensions and we have the strong support of our leader Ed Davey alongside Lords William Wallace and Chris Rennard and Lib Dem MP Wendy Chamberlain. We are also working closely with British overseas pension organisations in Australia, Canada and elsewhere and we are pressing for our case to be backed in the party’s next general election manifesto.
Under the frozen pension policy, those who live in certain countries that do not have reciprocal agreements with the UK are denied an annual cost-of-living increase, even though they paid their national insurance contributions in full during their working lives. The countries affected include most commonwealth nations as well as most developing countries. Some of the ‘frozen pensioners’ are fortunate in that they emigrated to Australia or Canada where the host governments provide a social net that prevents them from becoming destitute. This should be a cause for shame and embarrassment to the British government.
The recent burst of inflation is not confined to the UK. Pensioners overseas are suffering the same pressures. Those enjoying the 10.1% increase on 6th April may be comforted, even as inflation in the UK is currently running at 10.4%, but spare a thought for those faced with the same level of inflation but no additional income to compensate. Many are now receiving exactly the same pension they received 20 or even 30 years ago. Many outside Australia and Canada are destitute. I personally know some tragic cases, too old and sick to travel to the UK, even if they could afford the airfare.
The irony is that by living overseas the pensioners are putting no strain on the NHS or social services, so the country is benefiting hugely from their absence. Furthermore, frozen pensioners visiting the UK have no access to free NHS treatment or emergency accommodation. They have fewer rights than migrants!
There is one gleam of hope ahead apart from the Lib Dem support I have already mentioned. The right to vote is being restored to those who have lived overseas for over 15 years. Those who have been ignored for so long will soon have a say in who will run the country in the future. Lib Dems in the UK would do well to note that the voices of some 3.5 million overseas voters could make a difference, especially in the marginal seats where those voters used to live. We can win many of those voters by showing we are the only party whose concerns for our citizens do not stop at our borders.
* Colin Bloodworth is a member of the Lib Dems Overseas Executive .
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
The DVLA's problem with number plates
Frankie Valli and the Four Seasons: The Night
Is Kier Starmer the new John Major?
A bargain at 23 guineas?
20C night
Chloe
David Allen
Nonconformistradical
David Raw
26 Comments
Today is sad day for many millions of low paid workers who have seen their earnings eroded by inflation over a decade and yet pay high taxes to support 10% increases in the state pension.
I didn’t receive any increase in pension. It was the same as last time.
I may be in a minority on this site but I do not believe that people who have left the UK should continue to have a say in the laws that all those living in the UK should obey, or on the level of public services that are provided to for those of us who live in the UK. Entitlement to vote should be based on legal residency, and nothing else.
As for state pensions, yes it is an entitlement based on National Insurance payments, but Job Seekers’ Allowance and Maternity Allowance are also ‘earned’ by paying NI contributions – are we suggesting that people who move to live abroad should also retain the right to claim these benefits? If not, what is the justification for treating the state retirement pension differently from other contribution based benefits?
I presume we are talking about people who only receive a uk state pension and who on retirement went abroad, not people who went abroad early in their career and decided to remain abroad because life was so much better…
I think the author needs to do some more research on Australia, a retired friend I recently helped to “emigrate” to Australia to be with family was required to have: sufficient income to support themselves (greater than the UK state pension), sponsors in Australia who would provide for them, a reason to return to the UK, a minimum level of medical cover. There was a clear expectation that pensioners who became dependent upon the state would return to the UK…
Other members of my family who went out.to Oz decades back, built up Oz pensions so the UK component is a small but welcome addition.
Given the state pension could be regarded as a form of UBI/GBI there are ramifications in paying pensions i full to those who live abroad.
@Mel Borthwaite
“are we suggesting that people who move to live abroad should also retain the right to claim these benefits? If not, what is the justification for treating the state retirement pension differently from other contribution based benefits?”
In the original OP it states
“Under the frozen pension policy, those who live in certain countries that do not have reciprocal agreements with the UK are denied an annual cost-of-living increase, even though they paid their national insurance contributions in full during their working lives. ”
so the problem pertains to certain countries, not to all. If the other country has a reciprocal agreement concerning state pensions with the UK there isn’t a problem.
@nvelope2003 – If you’ve been paid same as before already this month – could it be because the increase only applies from the start of the tax year?
The pension increase actually comes in on April 10th so those whose four weekly payments fall before that date are still on the old rate until the next cycle. Rather annoying. I agree that the savings on NHS and social care are so large that it is a bit mean not to give expats an annual rise but, on the other hand, they were aware of this on leaving the country. The ruination of Sterling probably has an even greater effect than lack of rises, many third world countries that actually make things and have lots of assets have seen an almost doubling of their currency against sterling, so a double whammy of local inflation and disappearing currency value.
I fail to see why, if I were to now move abroad, my pension should be frozen. After all, my contributions won’t have changed.
For the record, the matter was put by question to the then responsible Minister (Steve Webb, Lib Dem, Thornbury & Yate), House of Commons on 2 December, 2010.
HANSARD State Retirement Pensions: Uprating
Mr Laurence Robertson (Con, Tewkesbury) : To ask the Secretary of State for Work and Pensions for what reason pensioners who retire to live abroad in some countries have their pensions up rated in line with inflation whereas those retiring to certain other countries do not; and if he will make a statement. [64572]
Dr. Steve Webb: The UK state pension is payable world wide but is only up-rated abroad where there is a legal requirement or reciprocal agreement to do so. A well known court case challenging the UK’s position was heard by the European Court of Human Rights Grand Chamber in September 2009 and the Court’s judgment of March 2010 was in the UK’s favour. We continue to take our obligations under the terms of the European Convention on Human Rights seriously and are satisfied that we are complying. We therefore have no plans to make any changes to the current arrangements that allow for the exportability and up rating of UK state pensions.
As i understand it, this standstill on pensions doesn’t apply to all overseas countries. It is most significant with 4 countries that were dominions in the late 1940s – Australia, Canada, New Zealand and South Africa. The assumption seems to have been that these countries would make up the difference from their social services budgets. Something that South Africa definitely didn’t do. I knew someone, who after being invalided out of the RAF in the 1950s went to South Africa, where he believed the climate would be better for his illness. His RAF pension stayed the same for half a century.
I believe that if you had the foresight to retire to the EU, or the USA, for example, you would get pension increases.
@Mel Borthwaite
There are very good reasons why people who have left the UK should have a say in the laws of the country. These include family, business or financial connections, and the possiblity of a return to a country which we hope will still be a United Kingdom, not one that has been torn apart by the policies of the present government.
If all Brits abroad had been allowed to vote in the referendum Brexit would never have happened.
The good news is that later this year the right to vote will be restored to those who have lived abroad for over 15 years.
3.5 million voices could have an important impact on the next general election.
Finally, frozen pensioners are not looking for special benefits or charity; they just want to enjoy the same rights for which other pensioners paid exactly the same.
“If all Brits abroad had been allowed to vote in the referendum Brexit would never have happened.”
I’m not here to champion Brexit but the idea that people living in the UK could have their vote overturned by those outside the UK sparks a few questions. Do you even have data to say the voting group you’re referring to would vote against Brexit? Would you still be supportive of them getting vote back in hypothetical situation that they could vote in Brexit vote, Brexit outcome had been marginally remain and suddenly that’s overturned by people living abroad? That’s the basis of the argument you’re making in reverse.
“Finally, frozen pensioners are not looking for special benefits or charity; they just want to enjoy the same rights for which other pensioners paid exactly the same.”
I know of one pensioner abroad who is resident in France, England and Wales depending on what is most advantageous to their circumstances. In this one example, they don’t want the same rights as other pensioners. They want better rights which their own wealth has afforded them to access. Meanwhile increasing numbers here are in poverty.
I’m not saying I’m against the idea, just that I’m yet to be convinced.
Sorry, I support the current policy.
We should only uplift the pensions of our pensioners living in country X, if country X agrees to the same for their pensioners living in the UK.
Reciprocity is the aim.
I would like to know more about what is blocking reciprocal agreements now being reached. The debate on this issue would also be helped if it was clarified as to what information was available from the UK Government for people at the time of leaving this country. Was the future freeze on pensions properly publicised? Was their no source for finding important information? If people left the UK and were misled as to their pension entitlement that is an issue – but was that the case? While I am very sympathetic to the case for full pension rises for everyone I do wish these points were addressed. If we are seriously arguing this should be a manifesto commitment – and a spending commitment – let’s get a few facts clarified.
As you have paid the same national insurance contributions, you should get the same pension.
Thie treatment of UK pensioners in the various countries mentioned is obviously unfair.
I am happy to address a few more issues that have been raised as there are clearly many misconceptions.
Reciprocal Agreements: In the early 2000s Australia rejected the offer of a reciprocal agreement with the UK because the UK government refused to include the issue of frozen pensions. The UK government has also stated in the past that it does not plan to sign any more reciprocal agreements. Presumably because they would be more favourable financially to the other parties.
Brits abroad views on Brexit: I have no data, but all the contacts I have made and all the reports I have read have pointed to Brits abroad being 100% against Brexit. Maybe by living abroad we could see the impending disaster more clearly than those living in the UK. I personally had never been interested in politics but joined the LIb Dems at the time of the referendum due to their pro-Europe stance even though I did not have the right to vote. I was shocked at the previously pro-Europe Tory politicians who changed horses for their own political gains.
European Court of Human Rights: It is true that the Court found in favour of the UK. However, I found that having read the report they were sympathetic to the case to unfreeze pensions but determined that only the UK government had the right to decide on such policy matters.
Steve Webb: It is true that he confirmed the frozen pension policy would remain. It is regrettable since he was in a position where he could have influenced the coalition government to end the injustice, but he failed to do so. That must not happen again if we have such an opportunity.
Increased poverty in the UK: This is abundantly clear but there is still a social net that provides access to medical services, food and shelter. Thousands of British pensioners in developing countries however have no protection whatsoever, including a large number who were in the armed forces and fought for the country, only to be rewarded with a frozen pension.
Previous knowledge of the policy: A survey conducted in 2019 by the All Party Parliamentary Group (APPG) on Frozen Pensions determined that 80% of pensioners living abroad were unaware of the policy when they left the UK. I was certainly unaware when I left the UK to work overseas. The fact is now published in a DWP leaflet but it was certainly not made publicly known in the past.
Thanks Colin for highlighting the issue once again. I’m not (yet) a pensioner but fortunately I live in Germany which will mean that under the current rules, then my future pension will be uprated.
We seem to have forgotten that the reason for British pensioners living abroad are multi-fold. It’s not just for a “better” life in retirement. Many of us moved initially for job reasons and remain heavily engaged in UK relations. Others have met their life partners.
I don’t see how the argument of “reciprocity” works. There seems to be nothing to justify it. There is no reason why the UK government should insist that foreign governments uprate the pensions of their citizens in the UK before UK pensions living abroad have their pensions uprated. The UK government’s responsibility is to its citizens.
I thought from the heading this was going to mention all those throughout the world that are suffering because of the cut in overseas aid from the 0.7% that we legislated for in the coalition. All ages.
Not complaining about the slant of the article, but adding this to put it all into perspective.
Nonconformist Radical. It was the first payment which was due after the beginning of the new tax year which the media said was the date on which the increase would be applied. I then received a letter saying it would not be applied until 10th April which is a public holiday so no one really knows when they will actually receive it now.
I’m not convinced as to why someone who no longer pays UK Tax, or contributes to the UK in any meaningful way should continue to retain inflation busting pension rises when they have voluntarily chosen to leave the UK.
This is a sense of entitlement “i’ve paid in my whole life and the pot should be waiting for me at the end” but it’s not the reality of pensions. You are paying for the generation ahead. You are owed little to nothing in pension rises.
Increasing pensions for those who no longer contribute to the UK would be yet another act of intergenerational warfare placing the highest burden on the young to pay for people who no longer contribute to British society.
@ Andrew,
“I’m not convinced as to why someone who no longer pays UK Tax, or contributes to the UK in any meaningful way should continue to retain inflation busting pension rises when they have voluntarily chosen to leave the UK.”
What difference does their place of residence make? From an economic POV it’s actually cheaper for the rest of us, even with full pension rights, for the elderly to not be resident in the UK. There’s then no requirement to provide health or social care services which are the biggest cost.
‘This is a sense of entitlement “i’ve paid in my whole life and the pot should be waiting for me at the end” but it’s not the reality of pensions. You are paying for the generation ahead. ‘
It is true that the Govt cannot save up its own IOUs in a future fund pot. The reality is that those who are economically active in the economy provide the real resources for those who aren’t. Our National Insurance deductions, like any other tax, take away our ability to temporarily consume as many resources we might like, when we like, in the interests of the wider society.
There is an implicit social contract involved in this process. The mechanism of the fiscal system doesn’t change this. When compelled by law to contribute to private pension schemes there is no question about it. We do have pension entitlements. It is morally and systematically no different with a state pension scheme.
@Peter
What difference does their place of residence make?
Because I remain unconvinced we should continue to assist those who have voluntarily chosen to leave the UK. Call me parochial, but I think once you chose to leave the territory voluntarily, you become the responsibility of your newly chosen home state.
It matters little as to whether it costs more or less, otherwise that same principle as you rightly point out can be applied to a whole host of things, but the contribution you make to the country by simply being here is the one of importance in my opinion.
Nobody is compelled by law to contribute, you could seek to remove yourself from all private pension schemes, although obviously, that would be a poor financial decision.
I think what remains different, is the deliberate sense of entitlement that comes with a pension, that the burden of the states largest financial outlay should continue to fall on an increasingly smaller cohort of people. The recipients of such are a generation who has systematically robbed from the future generations through inflated debt levels, soaring pension costs, immigration restrictions, NIMBYism etc.
There’s a quote from Frank Turner the singer, that sums it up all so nicely
“You’ve got a generation raised on the welfare state, who enjoyed all of it’s benefits and did just great, but as soon as they were settled as the richest of the rich, they kicked away the ladder and said, lifes a b…”
It’s time for some real intergeneration fairness.
@ Andrew,
“Nobody is compelled by law to contribute….”
NI insurance contributions certainly are compulsory.
Also private pension contributions too. According to the pensions regulator:
“The amount you and your staff member pay into your pension scheme may vary depending on which pension scheme you choose. However, by law, you and your staff have to pay a minimum amount into your scheme.”
Are you saying that payments to a private pension generate entitlements but similar payments to public one don’t?
Debt levels (I presume you mean govt debts) aren’t inflated as a % of GDP. They were much higher in the post war period and, by your own argument, they haven’t done the baby boomers any harm. However, GDP in the 60s was a fraction of what it is now. Many of us didn’t have cars. Many of us weren’t “on the phone” as was said at the time. Holidays were a week or two on a caravan site!
On the other hand universities were free for those with the right entry qualifications but this would have been for only a tiny fraction of school leavers. Most left school at 15 or 16 and worked from then on.
I can understand your problems with the level of rents and house prices but targetting the elderly, especially who have left the UK isn’t a solution. The young need to campaign on particular issues which affect them.
The reason that it’s such a difficult problem is that our system as with many others is a hybrid. The payments are not directly connected to contributions (as with private pensions where residency is irrelevent). We have a duty to ensure a decent standard of living for all long term residents regardless of citizenship. For a large proportion of British and British resident pensioners that makes the level of the contributary pension irrelevent. Other countries structure their pension systems in very different ways. They typically produce quite similar results for those that stay in the same country all their lives (that’s who they were designed for). There is an element based on contributions but they also have a floor for those who have not contributed enough. For those who move around though you can end up with people getting two pensions or none and governments can end up paying for both immigrants and emigrants or neither. Real reciprocity between different systems is impossible but bilateral kludges should always be possible to ensure all migrants between two countries get a pension that is relatively fair.
You only get a full state pension, if you’ve made full contributions.
No justifiable reason has been advanced by any doubter on here as to why pensioners – who’ve made those full contributions – in the relevant countries should be treated unfairly.
I note with displeasure the various ludicrous stereotypes about expats: come on, guys, be a little empirical. You’re allowed to be reasonable and accurate, you know.
Fairness is a core LD value.
“No justifiable reason has been advanced by any doubter on here as to why pensioners – who’ve made those full contributions – in the relevant countries should be treated unfairly.”
And anyone who has made – I think – at least 10 years’ worth of contributions is entitled to some state pension – I would have thought any such people living overseas should be treated on a pro rata basis.
Overseas citizen not citizen of U.K .?!