Overseas pensioners left in limbo over state pension

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It's fair to say that the past few months have been some of the most politically turbulent that we've witnessed for many years. A vote to leave the European Union, a new prime minister and cabinet, and a divided Labour party have left many of us feeling confused and concerned about our futures.

This couldn't be truer for British pensioners, living in both the UK and overseas. With so much political uncertainty, the dramatic fall of the pound and alarm bells ringing in the pension sector, it would seem that there's a great deal to feel worried about.

This isn't helped by the fact that our politicians are doing very little to put us at ease. We are in total limbo, not knowing if and when Article 50 will be triggered and what it will mean when it is.

Those worst affected are clearly the 470,000 British pensioners currently living in EU countries, who currently have no idea what their state pension entitlement may be post Brexit.

THE ISSUE OF FROZEN PENSIONS

Will they continue to be treated like UK resident pensioners, uprated each year, or will they find themselves with a frozen pension like many other British pensioners around the world.

It was unsettling, and yet not all that surprising, to hear former pensions minister Ros Altmann speak out recently about her own experiences in government. She said that too often 'politics can trump the interests of ordinary people'.

For myself and many of my friends and fellow campaigners, Ros Altmann's words resonate strongly with our own experience.

For more than 30 years we have been campaigning for justice on the issue of frozen pensions - an outdated quirk of our system which leads to more than half a million people suffering the injustice of having their state pension frozen at the point at which they left the UK (or first received it abroad).

For some, this means existing on as little as £30 a week, whilst pensioners in the UK now receive £119.30 a week. We have repeatedly been told that there is no money for reform, despite every effort to produce policy alternatives that are more than affordable, if not cost neutral.

This week, Baroness Altmann has criticised the triple lock, the mechanism which ensures that pensions rise by the higher of inflation, earnings or 2.5 per cent each year. She believes that it is costly, unsustainable and clearly maintained only for political purposes.

From a frozen pensioner perspective, I note that the 2.5 per cent increase awarded to the majority of British pensioners under this mechanism in 2015/16 cost over £1 billion more than if state pensions had been increased by the inflationary measure of CPI.

LOSS OF INDEPENDENCE

So, far from there being no money to spend, as we have been told, it seems there is plenty where there is a political will to do so. The cost to bring all currently frozen overseas pensioners up to their full, as UK, state pension entitlement would cost half this amount.

It isn't for me to make judgements as to the merits of the triple lock or otherwise. I would note however that without at least inflationary increases, pensioners quickly lose their independence, dignity and respect, and this is the very real experience for the half a million frozen pensioners living overseas.

If politics was truly about promoting the interests of ordinary people, then politicians would have addressed this injustice long ago.

Overseas pensioners paid in equally, and should therefore retain an equal entitlement to this basic income in retirement. Their treatment should be equal, regardless of country of residence, not the international lottery of the status quo.

Undoubtedly, there are issues with the pension system that need addressing and any system catering for people in their millions will encounter difficulties.

But alongside the challenging logistics, there are glaring injustices which successive governments and politicians have made promises about addressing, and successive governments have failed to act upon.

Until we have resolved these basic issues of equality and justice, we cannot make additional changes to the system.

Perhaps if the turmoil of the last few months can give us anything, it is the chance to reframe the battles of importance to us, and re-establish who our politics is working for and how we hold accountable those who should be acting on our behalf.

It's time to make sure that the interests of ordinary people trump politics, not the other way around.

John Markham is chair of the International Consortium of British Pensioners.


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Comments

Frozen pensions

The inequality highlights the disingenuous statements of politicians who claim fairness and equality are the driving force behind their policies. How is it that a friend of mine who lives near Niagara Falls in Canada has her pension frozen while her friend on the US side receives annual up-ratings? Both paid into the same club.
Ministers state that the reason behind freezing is that the cost of living in 'foreign' countries is not the same as UK - so how is USA different from Canada?
As John Markham states, the cost of applying the triple lock is around double the cost of up-rating all non-UK resident pensioners pensions

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