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An article from IPE
Iain Duncan Smith appointed UK pensions secretary

UK � Iain Duncan Smith, a former Conservative party leader, has been appointed secretary of state for work and pensions in the UK's first coalition government for more than 30 years.

Following the resignation of Gordon Brown last night, David Cameron, the leader of the Conservative Party becomes prime minister, and Nick Clegg, leader of the Liberal Democrat Party, deputy prime minister.

In charge of the Department of Work and Pensions, Duncan Smith will oversee the upcoming pension reforms scheduled for 2012 including the introduction of auto-enrolment into occupational pensions and the establishment of the National Employment Savings Trust (NEST).

However in the past former Conservative shadow work and pensions secretary Theresa May, and former shadow minister for pensions, Nigel Waterson had warned of concerns with the interaction between the new system and pensions means-testing. With May stating in December 2009: "There is a clear need to review the personal accounts project and a Conservative government would do just that."

In the coalition agreement the two political parties have agreed to "phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women. We agree to end the rules requiring compulsory annuitisation at 75".

It also stated the government would establish an independent commission to review the long-term affordability of public sector pensions, while protecting accrued rights. In addition it will link the state pension to earnings from April 2011 with a "triple guarantee" that pensions are raised by the higher of earnings, prices or 2.5%.
Rachel Vahey, head of pensions development at Aegon UK, said: "Iain Duncan Smith takes charge at a time of enormous pressure to meet short-term fiscal challenges. But we can�t ignore the longevity pressures that are putting the pensions system under strain in both the public and private sector."

She pointed out the previous government was set to break the link between income tax rates and pensions tax relief through a series of successive changes, however the coalition agreement does not mention the issue of pension tax relief.

Vahey said: "We urge the new coalition government to call an immediate halt to further changes to pension tax relief and to look at simpler alternatives to the proposals already announced to restrict higher rate tax relief, such as introducing a lower annual allowance."

"Both Conservative and Liberal Democrat manifestos contained some interesting proposals aimed at encouraging more pension saving, such as early access to pension funds and removing the requirement to secure a retirement income at age 75. But instead of this piecemeal approach we would encourage the government to conduct a wider review of what motivates people to save � both financial incentives and behavioural aspects of how people approach these decisions in the real world," she added.

The appointment of a pensions minister to replace Waterson after he lost his seat in a surprise Liberal Democrat election victory last week is expected in the next few days, although sources suggest the role may go to Steve Webb, the former Liberal Democrat shadow spokesman for work and pensions.

A response to a Times article on the Budget

Sir, Alastair Darling�s boast that Labour has a better record of looking after our elderly and vulnerable, and that pensioners are now entitled to �132.60 per week, is hypocrisy.

There are more than half a million British pensioners around the world who have been resigned to poverty by this Government. Pensioners retiring abroad will find their pension frozen, with no increases in line with the cost of living. These are pensioners who paid their national insurance contributions like everyone else but who are being robbed in their old age, veterans who fought for this country and are now being forced to live on as little as �6 per week in some cases.

How can this or any government claim to be caring for our older generations while this injustice continues?

John Markham
International Consortium of British Pensioners

Media Release

JENNY MACKLIN MP
Minister for Families, Housing, Community Services
and Indigenous Affairs

European court decision lets down UK pensioners again

The Australian Government is again disappointed by the decision of the Grand Chamber of the European Court of Human Rights, which will continue to deny indexed pensions to hundreds of thousands of United Kingdom pensioners living in Australia.

This decision is another blow to the 250,000 UK pensioners living in Australia who paid their contributions into the UK National Insurance Fund in good faith.

The British Government refuses to index its pensions paid to expatriates who live in Commonwealth countries such as Australia, South Africa, Canada and New Zealand. However UK pensions are fully indexed to people who live in the European Union, the USA, the Philippines, Israel and other countries.

The Australian Government believes this policy is discriminatory.

We have been actively lobbying the UK Government on this issue. I raised this issue face-to-face with the then UK Secretary of State for the Department for Work and Pensions and the Australian Government will continue to pursue this matter.

The UK�s policy severely disadvantages UK pensioners living in Australia, as over time their UK pensions have declined in real value.

This policy continues to place an increasing burden on all Australian taxpayers, as the Australian Government picks up the tab for around 170,000 UK pensioners who also receive means-tested Australian pensions - estimated at about $100 million per year in additional social security payments.

Australia terminated our social security agreement with the United Kingdom in 2001 because of this issue.

I congratulate the pensioners involved in the case for their tenacity and dedication in fighting hard for a fair go.

The Australian Government will continue to support UK pensioners living in Australia.

Date: 17 March 2010

Media contact: Keely Bell 0417 297 157

Must UK obey European court ?
by Rosalind Tosh, Editor of Justice. CABP Newsletter

Anticipating the Grand Chamber�s judgment is like finally catching a glimpse in the distance of a longed-for oasis after three whole decades of thirsting in the desert. But with every court in the kingdom previously declaring that the UK Government has the prerogative to discriminate against us frozen pensioners, why would Westminster give a hang when the European Court of Human Rights (ECHR) says differently and rules in our favour?

Fortunately, there are measures in place to ensure it happens.

First and foremost, as a signatory to the European Convention on Human Rights, the UK has committed to abide by the final judgments of the ECHR. This obliges Her Majesty�s Government to, on the one hand, take measures in favour of successful applicants � in this case, that would be us � in order to put an end to the human rights violations we have suffered, and as far as possible to erase their consequences; and on the other hand to take measures to prevent new, similar violations from occurring.

Who makes sure the UK follows through?

Extract from a letter from the Liberal Democrats
2nd Dec. 2009

I can assure you that Liberal Democrats firmly believe that pensioners that have paid taxes and contributed towards National Insurance should not be penalised for choosing to live abroad in retirement. We believe that the government should meet with groups representing pensioners to discuss how provision of a pension can be secured for those living overseas. We are very concerned that an estimated 524,730 British pensioners who live overseas have had their pensions "frozen" at the rate that they were first paid when they moved abroad. As you know, under this system in some countries, Britons living abroad become financially worse off each year despite the fact they may have a full contribution record their pension is not increased with inflation as it is for those pensioners living in Britain. We continue to believe that there is a pressing issue of injustice surrounding frozen pensions.

The Liberal Democrats also proposed an amendment to the 2006 Pensions Bill that called for pensions, including for those served overseas, be linked to prices and earnings. We again raised the issue of overseas pensions not being up-rated in debates on the Pension Act 2007. Please rest assured that the party�s long held commitment to challenging and rectifying the situation remains steadfast.

From the Office of Nick Clegg MP

Transcription of Peter Bottomley's video
In answer to a question from Dian Elvin regarding Frozen Pension Unfairness.

"The key issue is that, by total chance - no-one designed it - [it affects] people who retired, essentially to the old dominions, as you wrote, [where] a lot of people have gone.  Half our overseas pensioners are in places like Canada, South Africa, Australia, New Zealand - some of the Caribbean Islands as well.  They don't get uplifts in their state pensions, whereas people who live in the United States of America do (thus if you are below the 49th parallel you do and if you are above it, you don't).

"If you are in some of the Caribbean islands: if they were British originally, you don't [get the uplifting]; if they were French or Dutch you do.  If you are in the European Union you do. It's absolutely crazy!

"The cost wouldn't be a great deal to change that, but, because priorities are different, the campaign has been unsuccessful.  I have been associated with this campaign for many parliaments.  My recommendation to people is that when they're in this country, ask to see a member of parliament and say 'Can you please put this in your manifesto for the next election and, if possible do it within three years time'. To do it instantly is, I think, improbable.  That it needs to be done is clear.  And it's becoming a greater unfairness as each year goes by.

"If I was a pure practical economist or doing the government finances, I'd say actually it's the retirement years that are quite expensive in other costs besides pensions so I would encourage people to go and have a twelve-month holiday year after year in the Costa Lot (or Costa Little maybe). That basically saves the UK taxpayer money, so both in terms of fairness and in terms of fiscal efficiency, I am with the campaigners."