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British Overseas Pensioners Update

Posted by on Jun 16, 2012 in Retirement | 4 comments


June 15, 2012 – If you’re one of almost 600,000 British overseas pensioners, then you’ve never received an inflation adjusted increase to your UK pension. Unlike British pensioners in the UK, US, or the EU, British pensioners living in Canada or a number of other commonwealth countries have lived with frozen pensions, despite contributing on an equal basisduring working life in Britain.

In fact, no indexation has ever been paid to pensioners living in 48 of 53 Commonwealth countries, representing 91% of all expat UK pensioners. The remaining 9% are spread across 70 other non-Commonwealth countries.

Annual up-rating is paid to pensioners resident in UK, pensioners living in the European Union, and to those living in the USA, Israel, Bosnia-Herzegovina, Turkey, etc., (in total 50 countries).

The problem comes down to a lack of bi-lateral agreements between the UK and other countries and the UK’s unwillingness to pay to up-rate frozen pensions. There is justifiable resentment by UK pensioners who worked and earned their pensions in the UK, only to be treated differently from their counterparts in the UK, US, and EU.

A number of UK pensioners in commonwealth countries have sued the British government in the European Court of Human Rights (ECHR), and raised petitions with the British Parliament.  And, the UK expat group (The Canadian Alliance of British Pensioners) has initiated an online petition aimed at the UK Parliament. They have 20,000 signatures thus far and are hoping for 100,000 by September 2012.

Success has so far eluded ex-pat pensioners. In March 2010, the European Court of Human Rights (ECHR) ruled against several applicants suing the UK government for indexation of UK pensions. It found that no contravention of Human Rights were violated by the UK government in not providing non-resident UK citizens indexed pensions.

Earlier judgments (Court of Appeal, UK House of Lords) came to similar conclusions. In general, the conclusions are that state pensions are under no obligation to index funds for citizens that choose to reside outside of the home state. And, that the grounds for comparing a UK pension across various jurisdictions is too complex to conclude that pensioners in one state are better off than pensioners in another state i.e. (a UK citizen living in South African might be better off on an unadjusted pension than a UK pensioner in the UK on an adjusted one). The question of fairness is too complex to answer, according to these judgments.

The only way to mandate legally up-rating pensions is through reciprocal agreements with other countries. Agreements with Australia, New Zealand and Canada came into force in 1953, 1956 and 1959 respectively, but these did not require payment of up-rated pensions. The agreement with Australia was terminated by Australia as from 1 March 2001, because of the refusal of the United Kingdom to pay up-rated pensions to its pensioners living in Australia

In order for UK pensioners in Canada to receive an up-rating, the British and Canadian government would have to agree bilaterally to the same pension standards, in which Canada would have to treat Canadian expats in the UK the same way we treat Canadians at home and vice versa. The choice, at this point, is political, not legal.

CARP has raised the issue with officials in the Finance Minister’s office – as CARP has done over the years – and is awaiting official response.

Read more about the efforts by the Canadian Alliance of British Pensioners


Join the conversation and post a comment.

  1. George Tynesider

    It`s amazing how many people state the need for a bi lateral agreement on pension indexing, before anything can be done in that regard. This just isn`t so. The UK government can index the pensions of ALL british subjects living outside the UK, virtually by the stroke of a pen. Canada already indexes the pensions of it`s citizens living in the UK, (I don`t know about other `Frozen Countries`) so the only thing stopping the UK government, (and anyone else who supports frozen pensions) from agreeing to do the right and proper thing, can only be seen as spite.

  2. Andy Robertson-Fox

    Firstly I think all “frozen pensioners’ would want to express their thanks for your highlighting the problem. I actually live in Thailand and although this article primarily relates to Canada the frozen pension issue affects many Commonwealth and non commonwealth countries alike.
    Just 4% of the total UK Pensioners suffer this penalty – and for no crime.

    Unfortunately there are one or two errors in the article and I think these need to be pointed out as there is a danger the incorrect information will cause serious misunderstanding.

    The most striking aspect of your article with which I find fault is the reference to “The problem comes down to the lack of bi-lateral agreements between the UK and other countries” and, later, “In order for the UK pensioners in Canada to receive an uprating the British and Canadian governments would have to agree bilaterally to the same pensions standards”. This is quite simply untrue. There is no need for any bilateral agreement, reciprocal agrement or any other sort of agreement. The ball is completely in the hands of the UK government.
    In 1999 the then UK Minister for Pensions, Stephen Timms said that “An agreement is not strictly necessary to allow payment of pension increases, as that could be achieved through changingUK domestic legislation” . Furthermore, in 2007 James Purnell, who by then had become the Minister, said, “Of course it is not legally necessary to have a reciprocal arrangement before making such payments. Any government could do that unilaterally”. Even the UK Department for Work and Pensions no longer quotes the need for an agreement – only that it pays where ther already is one – clever phraeology!

    The second point is that your article says that if an agreement was signed between the UK and Canada it would have to agree to the same pension standards, in which Canada would have to treat Canadian expats in the UK in the same way we treat Canadians at home and vice versa. My understanding of the current situation is that Canadian Nationals already receive any uprating regardless of their country of residence but UK expats do not.

    Thank you for drawing the e-petition to your readers attention. A technical point only but I think this was the brainchild of the International Consortium of British Pensioners (ICBP) but fully supported by its associate members of whom CABP is one. Disappointingly you omitted the links to the appropriate site and which are http://bt.ly/BritPensions or
    http:// epetitions.direct.gov.uk/petitions/16387 and any British citizen is eligible to sign. Although the target is 100,000 signatures and it may not be possible to reach that figure by the deadline it is vitally important that everyone signs up to it; we must convince politicians we are serious.

    Again thank you for urging people to petition MPs on both sides of the pond. The group I belong to is called POP (Parity or Poverty) – we are small in number but very active and our contacts with both sets of MPs has revealed an alarming ignorance among them of the plight of the frozen pensioner and we aim to help educate them!

    One further point, if I may. I wonder how many Canadian MP s appreciate that the UK frozen pension policy is depriving the Canadian economy of a potential C$300,800,000 per year and, of course, discriminates against the UK expat who, in some cases, is actually being subsidised by the Canadian taxpayer…

    Thank you for letting me bring these matters to you attention – hopefuly you can issue corrections as I think it is vitaly imprtant that anyone and everyone should be aware that this discrimination lies fair and square at the foot of the my UK government and not the hosting country.

  3. Andy Robertson-Fox

    One slight error I’m afraid in my earlier comment. The second link to the e-petition should be http://epetitions.direct.gov.uk/petitions/16387. apologies for putting in a space where ther should not have been one
    (Actually I find proof reading my comments very difficult against the grey background)

  4. Jeff Chipps

    Congratulations Sheryl on the birth af your grand daughter and I hope mother and baby are doing OK.
    Thank you for bring the issue of the frozen pensioner to the attention of your readers – it’s an issue that’s been overlooked by too many for too long.
    Andy Robertson Fox mentioned The POP Group in his comment, and I am proud to be the Moderator of that group.
    We felt that we just had to point out the errors in the article – as the inaccuracies it contains spread the wrong message around.
    It’s taken us years of effort to get the UK Department of Works and Pensions to retract their lie – that an agreement was required between Canada and the UK before the UK could change their policy, and for it to be resurrected in the article is beyond belief when the true facts are so easily obtainable.
    I earnestly hope you can print an article on the true nature of our predicament, and the steps we are taking to change it for the better!!
    As Sheila Telford stated – the CABP (and the ICBP) is an excellent scource of accurate information on the subject of the UK frozen pension, and I would recommend you contact them for future material.
    Thank you once again for highlighting our plight, and I can reiterate the others who have said that we’re determind to get what we’re owed!!! We will never give up until we get our “paid-for” pension!!!

    Jeff Chipps. Moderator The POP Group.

    PS I agree with Andy that the grey on grey window for typing comments into leaves a lot to be desired!!! Please blame any typos on that!!!! :o))

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