It’s frosty out there: the Plight of Expat Pensioners

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.

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17 Responses to It’s frosty out there: the Plight of Expat Pensioners

  1. Madeleine Wright says:

    Maybe giving us back our voting rights might help to solve this???

  2. Gary Rickard says:

    Please don’t give up on the Spanish property problems. I know you gave it your attention in the past.

    The Andalucian decree to regularise irregular properties does nothing of the sort. The policy continues to be one of denial of responsibility by the authorities that presided over the mess whilst ruining the lives of their victims.
    The only difference is that now a regional coalition of Socialists & Communists has taken over from the corrupt & inept Socialists. As if Snr Rajoy doesn’t have enough problems without this bunch of clowns running the Andalucian circus.

  3. George Morley says:

    Yes you are right Madeleine, and as pensioners whose pensions and taxes are controlled by the UK government this should be changed to give all British citizens a vote and access to the government and a say in who represents them.. As for the pension injustice of freezing, a change here is long overdue. I would ask Roger Helmer if all the EU countries pay their citizens abroad (wherever that may be – worldwide ) their full uprated pensions ? I suspect that they do. And why do the British government have to unfreeze the pensioners if a frozen country joins them ? If this is the standard for the EU , then the UK are out of step and I am waiting for them to be told to get their house in order. Perhaps you would raise this Mr Helmer ?

    • Brian Brown says:

      I believe that Britain is alone in the OECD countries to freeze pensions. But Britain is also guilty of ignoring the Commonwealth Charter signed by The Queen last year – apparently, the UK does not have to comply with international documents signed by The Queen on behalf of the nation! See for full details.

  4. ExPatGeordie says:

    There are a number of Frozen pensioners who are not prepared to lie down, whilst the UK government of the day brazenly discriminates against them. Isn’t it time that more frozen ex-pats joined the fray. Remember Peter Finch’s Character screaming “I’M MAD AS HELL, AND I”M NOT GOING TO TAKE IT ANY MORE” Well, why don’t more of us scream and gouge a little more. Raise merry hell, and keep doing it. It is the only thing that politicians understand. Lets make 2012 the year of the angry frozen pensioners.

    • George Morley says:

      I’m totally in agreement with you Geordie, Keep writing and make their life a bloody misery. If they don’t like it, they know what to do. Pay up, after all it’s not their money anyway. This is totally seperate from the debt that past politicians have built up anyway so quoting that as a reason is just another lie. Pension parity is affordable.

      • Jane Davies says:

        You are so right George…it’s not their money to withhold. It’s our come this and past governments are able to carry on doing this? Is nobody with influence going to insist this injustice is brought to an end? British pensioners are really suffering at the hands of the of the British government…have these people who “run” the country no shame?

  5. Jane Davies says:

    Contrary to popular belief not all expats are sunning themselves on sandy beaches. I am a frozen expat retired to join family in Canada. If I lived a few miles away in the USA I would get my rightful annual increases. Not a word about this discriminatory treatment all the while I paid my NI for 30 odd years. My property tax has just increased by 13.6%, gas (petrol) is expensive as is food and the utilities. Life is hard enough for pensioners still in the UK trying to live on the lowest pension in Europe but to have that low pension frozen just because of ones address is outrageous. This is discrimination in it’s lowest form as it hits the most vulnerable in society, how Steve Webb can say he is committed to lifting ALL pensioners out of poverty then dismisses even discussing the frozen pension injustice beggars belief. This same minister pledged to end this disgraceful treatment of just 4% of pensioners if we voted for him, then once in he has turned his back on us. He forgets many of us newly retired expats can still vote, I have ten more years, so I will make sure I do not vote for this lot again. Thank you Roger Helmer for highlighting this injustice. Please help us in our fight for our rights as it seems that our pleas for justice are ignored time and time again by two faced politicians who are only concerned with making their wealthy buddies richer.

  6. Andy robertson-Fox says:

    While the problems of housing in Spain may not be able to be resolved solely by the UK government the discriminatory “frozen pension” policy can be, overnight by the stroke of a pen.

    There is no legal justification for this policy. The ruling by the European Court of Human Rights on the Carson case did not make payment of pensions or the uprating of them world wide illegal.

    There is no moral justification. Contributions to the National Insurance Scheme were made during their working lives by these pensioners, who are of course UK citizens too, under the same terms and conditions as everyone else. Now in retirement they should be able to withdraw from the fund under the same terms and conditions as everyone else. Country of residence is totally irrelevant.

    There is no financial justification for this discrimination. As Mr. Helmer rightly points out there is around £40 Billion – yes, £40 billion – in SURPLUS in the fund; on which the interest alone would fund the increase. In the long term it has been shown that it would be to the advantage to the UK economy to meet this obligation.

    There is no administrative justification, either. Pensions are already paid world wide so it is only a simple exercise in implementing the annual uprating as appropriate to 100% of pensioners instead of having a separate system for the “frozen 4%”.

    It is, of course, an indictment not only of the current government that this blatant discrimination exists but an indictment of ALL administrations over the last sixty plus years and it is long past the time when it should have been abolished; indeed it should never have existed in the first place and is as out dated as the law that required a man with the red flag to walk in front of the car!

    Unfortunately Messers Cameron, Clegg, Osborne and Webb also seem to belong to a different era and with different moral standards from the vast majority of the honest UK citizenship. It seems as if giving your promises when in opposition prior to election are negated on actually taking office. The promises of these individuals to end this discrimination being no exception.

    Well, said, Mr Helmer….the frozen pensioner fights on!

  7. Bernard and Christine Shrubsole says:

    I was drawing my age pension and increases for 10 years, my husband for 3 before leaving to join family in OZ
    Brits bleat we make no contribution to UK economy. However Income tax is stopped at source
    on my husbands” Military ,Works and State Pensions ( because they are all combined for Tax
    purposes.) We are not (living the life of ” Riley ” as our combined income is below 18.000 Pounds
    per year. We lose our voting rights in 3 years.
    C.A. Shrubsole

    • Jane Davies says:

      Oh, but doesn’t it give one a warm and fuzzy feeling that incarcerated criminals have more rights than us? No? The European Court of Human Rights is demanding they retain their right to vote. Another warm and fuzzy feeling…..clerics preaching hate have more rights than us……Again the ECHR says so. We just worked hard all our lives paid our taxes and NI then get dumped on from a great height just because we retired to a “wrong” country.

  8. ExPatGeordie says:

    To those who say that we shouldn’t qualify for annual pension increments because we do not contribute to the UK economy, I would ask, What contribution do pensioners living in the USA, Israel, or The Phillipines make? The answer of course is exactly as much as we “Frozen Pensioners do. Yet their pensions are up rated annually. That’s another excuse completely discredited. I’m sure that there are many more, so let’s hear them.

    • George Morley says:

      It would seem to me that our employers have been ripped of as well because they were contributing for our pensions in the same way that we were. We were also the generation that were taxed to pay for the lease/lend to both the USA and Canada and without that help we would not have won the war. So the payback took 61 years before it was cleared in 2006. So those who bleat about us not paying taxes have no argument in my view. Personally I think Germany should have paid the bill.

    • Brian Brown says:

      I have listed all the know excuses – and my analysis – on my website
      There is also some interesting stuff on the way the DWP has tried to mislead everyone regarding Life Certificates.

  9. Jeff Chipps says:

    Thank you Mr Helmer for highlighting a cause the the UK government have shamefully ignoring and avoiding for far too long. The current UK pension policy is based on discrimination spelt with a capital D.
    If the UK pays 96% of its pensioners a pension that’s increased every year – but does not increase the pension of the remaining 4% (even though that 4% have contributed to the NIF as much as they were required to) then that’s fraud, and that’s criminal.
    Can you imagine a private pension company getting away with this type of shameful manouver – where they refuse to pay part of your pension because of where you live?? That company would be up before the beaks of the Old Bailey before they could blink!!
    But the UK government think they can get away with this – because they write their own laws – as unfair and unjust as they may be. We have to show the world how cruel and discriminatory this shameful policy is.
    The current PM and his crew don’t need to be told this – they knew the facts when they were in Opposition – and they swore to kill this dreadful procedure once they were elected. They lied! They spoke with forked tongues. They wriggled like worms on a hook until they convinced themselves that they were right in ignoring us and deceiving us yet again.
    Well I’ll tell you this – we will not be ignored or deceived any longer. We will fight for what is ours! We will do whatever we can to get the justice we deserve! We have the means to be heard and we’ll use them. We will not shut up, roll over and be quiet just because we’re getting on a bit. If anything that’ll make us more determined to get our pensions “unfrozen” as they should have been all along.
    Mr Helmer, thank you once again for your true words and your valued support.

  10. Elaine Page says:

    Dear Mr. Helmer, you are a rare being, a man of honour with a sense of justice. This issue of the frozen pensions is outrageous. These pensioners have paid ‘their dues’ yet the Brit. govt. reneges on fulfilling their part of the ‘contract’ – but only with those who settle in certain countries. I do not wish to cloud the issue – however the British Taxpayer at home is also being attacked by govt. 40,000 elderly taxpayers are having their homes and life-savings taken to pay care home fees. This theft impoverishes their families. All non-contributors, convicts and foreign nationals will receive a lifetime of benefits and then free care should they need it in their old age. Home mortgages and savings are already taxed twice – taking those homes and savings, creates the hgihest level of taxation; proportionately, for this group, our most worthy and most vulnerable citizens – the elderly British Taxpayer. This abuse of power also destroys the aspirations of our young people – why work a lifetime and pay taxes to have your lifetime achievements removed by govt. I hope this issue can be brought into consideration when discussing the frozen pensions and the continued attack on our Elderly British Taxpayers.

  11. adennis Purvis says:

    Now that Her Majesty has signed a document which denounces discrimination for any reason, in Commonwealth Countries, can we now expect to see the discriminatory “Frozen Pension” policy repealed?

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