The promise of blue skies, sandy beaches and the expat lifestyle is undeniably appealing — so much so that around 1.1 million British State Pensioners have chosen to spend their retirement years overseas. For many, the dream goes sour when they find an eviction notice on the doormat and a bulldozer at the gate.
I have written extensively about the iniquity of Spanish property laws, and urged constituents to think twice before buying property in Spain. I make no apology for referring again to Betjeman’s famous poem “The Costa Blanca”, which summarises the plight of British retirees who find themselves stranded in Spain in “the house with scorpions in the bath”, which I quoted in my blog piece above.
But for nearly 556,000 UK pensioners outside Europe, the dream is turning increasingly cold as their ‘frozen’ state pensions dwindle in value every year.
While pensioners emigrating to Europe, the USA and over 40 other countries have their state pensions indexed annually, as in the UK, 4.4% of pensioners in mainly Commonwealth countries have their pensions ‘frozen’ in time, meaning they remain at exactly the same level as when their recipients first moved abroad. (Yet another example of what looks like deliberate discrimination against the Commonwealth, by the way).
For these 556,000 British pensioners, retired life is becoming increasingly difficult with some forced to live on as little as £33 per week. This is not only deeply unfair — these pensioners have been contributing via National Insurance contributions all their lives, regardless of which sunnier clime they move to — but strangely illogical.
It’s estimated that by moving abroad British State Pensioners save the Treasury around £3 billion a year through the NHS and various social services: unfreezing pensions would encourage even more people to retire overseas, thereby saving even more money. Granting parity to all British pensioners — who, keep in mind, have already paid during their National Insurance Contributions — might not be cheap, but it would be fair and right. There are a few places to find the money — perhaps it could be paid for by the annual surplus of the National Insurance Fund, the balance of which is currently around £40 billion. Another source of funding would be to stop the ridiculous practice of sending Winter Fuel Allowance and other similar pensioner support payments to hot countries where they are simply not needed.
There does not appear to be any rational explanation for such a great disparity in the way we treat our older people, and given the scale of the deficit and national debt in the UK it appears unlikely that any Government will sort this out. It is well known that older people are the most reliable voters and some might think the three old Parties are missing a trick here, but after 15 years abroad Expats lose their right to vote, so perhaps little political capital is to be made.
George Osborne should correct this position because it is morally right and fair to do so — but also because, as I’ve explained, it may well turn out to be revenue-neutral (or even positive). This reform may join the list of good things which the Chancellor could do at zero cost — like, for example, reducing employment taxes.
I don’t expect to face these problems, because I have every intention of retiring right here in Leicestershire. Indeed I would have done so already but for the obstinacy and petulance of Conservative Party Chairman Baroness Warsi.