Britain’s Second Class Pensioners – Over Half a Million of Them!
Introduction
This paper was prepared by the International Consortium of British Pensioners.
Its primary purpose is to provide an overview of the plight of
Britain’s Second Class Pensioners who have decided to live overseas
during their retirement but find that their Basic State Pensions are
frozen by the British government based solely upon where they decided
to live. It includes the relevant information contained in the
speech made by ICBP` Chairman, Tony Bockman, at the opening session of
the NPC’s Pensioner Parliament in Blackpool on 14 June 2011.
The Issue
• Over twelve and a half million people receive the
basic state pension. ALL of them contributed similarly to that
pension through their compulsory National Insurance Contributions
(NICs).
• The amount of pension they initially received was
directly proportional to the number of years they paid those
Contributions.
• Of those 12 million plus pensioners, more than one million now live outside the UK – Overseas!
• Half of that one million plus receive the same
annual uprating as the pensioners who still live in the UK, just as
though they never left. They live in places like the EU, the USA,
the Philippines, Israel, Bosnia, etc.
• The other half million plus, over 95% of whom live
in Commonwealth countries like Australia, Canada, South Africa, New
Zealand, etc, do not receive any increases – EVER! Their pensions
are permanently frozen at the level at which they first received them
in their country of residence, solely because of where they have chosen
to live in retirement.
That’s right, no increases - EVER - even though they made those similar
compulsory National Insurance Contributions, just like everyone else!
If this seems unfair to you, just how unfair is it for Mr and Mrs Pensioner who live in Canada?
Joe Pensioner worked his whole life and qualified for a full Category A
pension of £52 a week when he reached retirement age in mid 1991. His
wife, Joyce, had spent a good piece of her life staying home and
looking after their two kids but she qualified for a Category B pension
of £31.20 a week based upon Joe’s NICs.
Their kids had emigrated to Canada some years earlier. Joe and
Joyce had already decided that when Joe retired they would move to
Canada to be closer to the kids and the grand children. They were
a close family and it just seemed the natural thing to do. (It
could have been Australia, South Africa or any one of almost 120 other
countries, including most Commonwealth countries, and for any other
personal reason.)
It’s twenty years on and Joe and Joyce are relatively healthy 85 year
olds looking forward to the arrival of their first great
grandchild. Problem is their financial position is not as healthy
as it used to be. The primary reason for that situation is that
their basic State Pensions are still at exactly the same rate they were
when they arrived in Canada in 1991, £52 a week for Joe and £31.20 a
week for Joyce. Had they emigrated to the USA, just 50 miles
south of where they now live in Ottawa, Joe would be getting £102.15 a
week and Joyce £61.20 a week, effective 11 April 2011. Put
another way, their pensions are now just 51% of what they should
be! Second class pensions!
Just because they chose to live close to their family in
retirement! Even though they made those similar compulsory NICs
just like all those pensioners living in the USA, or France, or
Germany, or Spain or Israel!
No pension scheme should penalize some of its beneficiaries because of
where they choose to live, especially when the number of years of
contributions to the scheme directly determines the amount of pension
they will receive. Consequently, over half a million pensioners
have made first class contributions to a second class pension; that is
morally wrong!
The reason given by the Government for not changing its policy is that
it up-rates pensions to overseas pensioners only when there is a legal
requirement to do so, as with those living in the EU, or when there is
a reciprocal agreement in place with a particular country; it goes on
to say it has no plans to expand the reciprocal agreements to more
countries. How can that be? How can a Government that
stresses the need for fairness for all, and that expresses its concern
for the well being and dignity of the elderly, penalize half a million
of its pensioners just because of where they choose to live in
retirement? And especially when numerous Pensions Ministers have
made a mockery of this policy by admitting in Parliament, both in the
House and in committee, that there is no legal requirement for a
reciprocal agreement to be in place before extending parity to all
pensioners if the Government had the will to do so. So what’s
stopping them?
When all the excuses are over and done, it comes down to money, or so
the Government would have us believe. The Government states that
the economy cannot afford the estimated £620 million per annum to
uprate all pensions to parity – in spite of the fact that this
represents significantly less than 1% of the annual Pensions and
Benefits Budget.
To put all of that in perspective, a recent study by Oxford Economics
has confirmed the ICBP’s beliefs that ALL pensioners who live overseas
already create an economic savings of more than £3 billion annually.
That’s right, £3 billion! How come? The main sources of
savings come from lack of demand on the NHS, no added benefits, no
social costs, etc. The study also considered recent surveys on
the intentions of individuals to emigrate after retirement; these
indicate that removal of the pension freezing policy would
significantly increase the numbers wishing to emigrate and thus produce
a corresponding additional increase in net savings to the UK economy of
some £33 billion over the next 20 years. Another benefit, not
included in that £33 billion, is that emigrants also relieve pressure
on the shortage of hospital beds, facilities for the elderly and the
shortage of affordable housing units.
Help Us Change This Immoral Policy
Generally this situation is not known or understood by the British
Public, who need to be warned that the current policy of pension
freezing will apply to those who may wish to emigrate in the future.
We ask you to make your voices heard, and those of the electorate at
large, to press for all pensioners who live overseas, now or in the
future, to be treated in an even handed manner. They deserve no
less fairness or concern for their dignity and well being than any
other recipient of the basic state pension, wherever they might choose
live in their old age.
Write to your MPs and demand that they sign EDM 1895 which calls for
changes to the Social Security Uprating Regulation which imposes this
policy. Send them a copy of this document to support your letter.
Ask your family and friends to do the same. Write to the Prime
Minister and to the Pensions Minister and demand that they work with
the International Consortium of British Pensioners to resolve this
issue.
If you would like additional information, you can contact us by post at
the address above or by email at jmarkham@sympatico.ca or
tony.bockman@primus.ca or check out our website at
www.pension-parity-uk.com . We look forward to hearing from you.