Frozen pensions debate in parliament

[Fisher1]

Hi all

 

This thread will be primarily of interest to UK pensioners applying for parent visas, although eventually it affects all UK migrants.

 

I have been following the progress of the international Consortium of Brisish Pensioners and their heroic struggle to gain pensions equality for recipients of the UK state pension, regardless of their location. There was a debate in parliament on this issue this week which, although not producing the required cash, did at least show increasing support for the issue on both sides of the house.

 

Ive just been reading the transcript, and it occurred to me that this site is a great place to publicize the efforts of the ICBP and to encourage fellow members of 'the waiting room' to join the Ozzie association which I think is called British Pensioners in Australia.

 

Im assuming everyone on the parents visa trail knows that our pensions will be frozen when we finally get to the promised land?

[Celt Down Under]

www.bpia.org.au This gives info on the ongoing fight for indexed pensions from the UK when living in Australia.

[Parley]

It is a vexed issue.

I am unsure whether I think the British Taxpayer should fund people who have moved permanently to another country.

[Gbye grey sky]

It is a vexed issue.

I am unsure whether I think the British Taxpayer should fund people who have moved permanently to another country.

 

The UK operates a contributory pension scheme so these pensioners have contributed so surely deserve the same pension as others. Bear in mind that these pensions are index linked for pensioners who move to many countries outside the UK.

 

Your opinion might change on this when you realise that many of these UK pensioners are often subsidised by the Australian taxpayer who may make up the shortfall in the pension paid from the UK with the Australian aged pension. Surely that cannot be right.

[Gbye grey sky]

Hi all

 

This thread will be primarily of interest to UK pensioners applying for parent visas, although eventually it affects all UK migrants.

 

Good thread, thank you.

 

It will be of interest to many more people than that. There are many thousands of current pensioners locked in to pension rates years or even decades out of date.

 

I will be entitled to a full UK state pension in 11 years from now (exactly) so I will be watching with interest. For the sake of those before me I hope this doesn't take a decade to resolve.

[Fisher1]

It is a vexed issue.

I am unsure whether I think the British Taxpayer should fund people who have moved permanently to another country.

 

Thank you parley - I was wondering how I could make this thread more interesting, thus avoiding it disappearing into cyberspace, and you've done it for me by saying something contentious. As you are clearly interested but not too well informed about this issue, you may like to read the transcript of the debate which is available at Hansard online. If you google Hansard online the link will come up, then you select the date (May 11th) and scroll down to the heading about British pensions. The issue of frozen pensions is clarified far more eloquently during this debate than I could hope to clarify it here.

 

In a nutshell though, it is not about 'the British taxpayer' (which incidentally includes many of the people affected by this issue) funding people who have moved permenantly to another country. It is about 'the British taxpayer' (ditto) funding some of the people who have moved to another country but not others. For example, a U.K. Pensioner living on the USA side of Niagara Falls would have his pension regularly updated with cost of living allowances, while a UK pensioner living a mile or so away on the Canadian side would not. How ridiculous is that?

 

and G'bye blue sky is correct about Australian tax payers making up the difference. One of the pathetic excuses offered by the UK govt. during this debate was that if pensions were updated, much of the money would go to people in receipt of benefits in their adopted countries (I wonder why?) and that these benefits would be subsequently reduced, so it wouldn't be worth it!

 

This discrimination has been going on for years, and thanks to the work of the ICBP MPs on both sides of the house are beginning to voice a protest. I hope some of the people on here will join or support the B.P.I.A (thanks, Jockintas) or even write to their MP to ask why nothing is being done to put this injustice right.

[Fisher1]

Hi all

 

I'm just bumping this up and hoping it won't be moved - again - to the backwaters of old forum posts until potential migrants still in the UK - who may well be interested in the progress of this campaign - have had a chance to read it.

[winter1]

It is a vexed issue.

I am unsure whether I think the British Taxpayer should fund people who have moved permanently to another country.

 

As stated in the Debate in Parliament many people who would like to return to their country of origin from the UK when they retire are not doing so because their pensions will be frozen.

If many from the Caribbean and the Indian subcontinent retired back to their original homes it would save the UK around £4000 net per person a year. We have paid for this pension through our National Insurance over many years some as many as 44 years (although the qualifying period for a full pension is now 35 years).

People retiring to Australia to be with their children and grandchildren are also very badly treated under this they can get no pension from Australia yet the UK government stops and annual increase as soon as they leave the UK. It is just not fair.

[VERYSTORMY]

As stated in the Debate in Parliament many people who would like to return to their country of origin from the UK when they retire are not doing so because their pensions will be frozen.

If many from the Caribbean and the Indian subcontinent retired back to their original homes it would save the UK around £4000 net per person a year. We have paid for this pension through our National Insurance over many years some as many as 44 years (although the qualifying period for a full pension is now 35 years).

People retiring to Australia to be with their children and grandchildren are also very badly treated under this they can get no pension from Australia yet the UK government stops and annual increase as soon as they leave the UK. It is just not fair.

 

I can see both sides. The saving of cash for anyone retiring away from the UK is a major plus. However, I can also see that a person has taken the choice to leave the UK and has assumedly taken account of their finances.

[Gbye grey sky]

I can see both sides. The saving of cash for anyone retiring away from the UK is a major plus. However, I can also see that a person has taken the choice to leave the UK and has assumedly taken account of their finances.

 

Those who make the choice do so in the knowledge of this, that's true. But clearly there are people stuck in Britain due to this when it would be in everyone's interest to pay them what, at the end of the day, is an entitlement based on their contributions.

 

If you took out a private pension and the company reduced the payments depending on the country you chose to live in even if you paid the same premiums as those who were paid more would you view it differently.

[Fisher1]

I can see both sides. The saving of cash for anyone retiring away from the UK is a major plus. However, I can also see that a person has taken the choice to leave the UK and has assumedly taken account of their finances.

 

Sorry verystormy but you are missing the point - the cost of living increases payable on pensions collected in the UK are paid to people living outside the UK as well, but only in certain countries! What are the two sides of that? pensioners on side of Niagara Falls deserve to be paid more than those on the other? furthermore, the fact that most people would presumably have taken account of their finances doesn't make the need to do so fair.

[Ken]

Sorry verystormy but you are missing the point - the cost of living increases payable on pensions collected in the UK are paid to people living outside the UK as well, but only in certain countries! What are the two sides of that? pensioners on side of Niagara Falls deserve to be paid more than those on the other? furthermore, the fact that most people would presumably have taken account of their finances doesn't make the need to do so fair.

 

Actually it does make sense. The pensioners on one side of the Niagara falls have a government that has a bilateral agreement with the UK that requires them to pay their pensioners a full pension if they move to the UK and for the UK to pay a full pension to it's pensioners over there.

 

Despite claims to the contrary (many of them made by politicians) National Insurance does not fund pensions it goes into exactly the same pot as income tax. National Insurance is actually just a way to mask the real rate of income tax. UK pensions are funded by current tax payers and it's in their interests to pay more to people who spend that pension in the UK. Because the Australian government does not pay the Australian aged pension to Australian pensioners in the UK, the UK taxpayer cannot afford to pay the full UK pension to UK pensioners in Australia.

 

If you really want the UK government to change it's position you should be campaigning for the Australian government to pay the aged pension to Australians in the UK. There's a federal election on at the moment so the next time a candidate canvasses you ask them what they are going to do about the aged pension.

[Steve2]

This is very important to all permanent migrants from the UK whatever their current age as everyone will eventually be entitled to their UK state pension over there.

 

I would ask the moderators to make this a "sticky thread" please!!

[Fisher1]

Actually it does make sense. The pensioners on one side of the Niagara falls have a government that has a bilateral agreement with the UK that requires them to pay their pensioners a full pension if they move to the UK and for the UK to pay a full pension to it's pensioners over there.

 

Despite claims to the contrary (many of them made by politicians) National Insurance does not fund pensions it goes into exactly the same pot as income tax. National Insurance is actually just a way to mask the real rate of income tax. UK pensions are funded by current tax payers and it's in their interests to pay more to people who spend that pension in the UK. Because the Australian government does not pay the Australian aged pension to Australian pensioners in the UK, the UK taxpayer cannot afford to pay the full UK pension to UK pensioners in Australia.

 

If you really want the UK government to change it's position you should be campaigning for the Australian government to pay the aged pension to Australians in the UK. There's a federal election on at the moment so the next time a candidate canvasses you ask them what they are going to do about the aged pension.

 

 

You make a good point, Ken, in explaining the cause of these differences - i.e. The presence or absence of a reciprocal agreement between Britain and the adopted country of any individual pensioner. However this does not alter the injustice and I doubt very much that it makes sense. The majority of people affected by this issue live in countries where there is no bilateral agreement, i.e. Australia, New Zealand, Canada. Many of them have moved to be close to family, yet successive governments in the UK have made no attempt to organise any reciprocal agreements with those countries.

 

Not being a qualified accountant or a tax expert, I can't argue with your claim that national insurance goes directly to the same pot as income tax. However, if the deductions mandatorily deducted from my salary whichwere classified as 'graduated pension' paymente were not funding pensions (albeit those of the generation prior to mine) then why would the number of payments make a difference to the amount I received on reaching 63?

 

The government I need to lobby is my own UK government, since I am unlikely to be canvassed by a candidate for the federal election in Llandudno. But if one happens by, I'll be sure to mention the aged pension.

 

in the mean time, I would repeat my original purpose in starting this thread ... To encourage other people to stay informed and to support the only group actively trying to change things ... The international consortium of British pensioners and British Pensioners in Australia.

 

 

ps As I'm sure you know, Ken, the UK govt save a great deal of money on pensioners who move abroad because they cost the state nothing in terms of health and social care.

[Guest]

Actually it does make sense. The pensioners on one side of the Niagara falls have a government that has a bilateral agreement with the UK that requires them to pay their pensioners a full pension if they move to the UK and for the UK to pay a full pension to it's pensioners over there.

 

Despite claims to the contrary (many of them made by politicians) National Insurance does not fund pensions it goes into exactly the same pot as income tax. National Insurance is actually just a way to mask the real rate of income tax. UK pensions are funded by current tax payers and it's in their interests to pay more to people who spend that pension in the UK. Because the Australian government does not pay the Australian aged pension to Australian pensioners in the UK, the UK taxpayer cannot afford to pay the full UK pension to UK pensioners in Australia.

 

If you really want the UK government to change it's position you should be campaigning for the Australian government to pay the aged pension to Australians in the UK. There's a federal election on at the moment so the next time a candidate canvasses you ask them what they are going to do about the aged pension.

I believe the original agreement between both countries broke down because of the UK stance on not indexing the pensions for UK citizens living in Australia. Australia does pay pensions to those living in the UK provided you are already getting it before you move or you move back to Australia for a period of time before/after claiming not sure of the times frames. It's a crazy system given that in other countries you can claim the Australian pension. As others said it really comes down to not having a pension agreement between the two countries. Crazy!!

[Gbye grey sky]

Actually it does make sense. The pensioners on one side of the Niagara falls have a government that has a bilateral agreement with the UK that requires them to pay their pensioners a full pension if they move to the UK and for the UK to pay a full pension to it's pensioners over there.

 

Despite claims to the contrary (many of them made by politicians) National Insurance does not fund pensions it goes into exactly the same pot as income tax. National Insurance is actually just a way to mask the real rate of income tax. UK pensions are funded by current tax payers and it's in their interests to pay more to people who spend that pension in the UK. Because the Australian government does not pay the Australian aged pension to Australian pensioners in the UK, the UK taxpayer cannot afford to pay the full UK pension to UK pensioners in Australia.

 

If you really want the UK government to change it's position you should be campaigning for the Australian government to pay the aged pension to Australians in the UK. There's a federal election on at the moment so the next time a candidate canvasses you ask them what they are going to do about the aged pension.

 

I am well aware that NI contributions go into the same pot as all other taxes and are not retained as a fund for individual's future pension but this applies to all pensioners wherever they may be in the world and the amount of pension entitlement is calculated based on the number of years that you contributed up to 35 years. Unlike Australia, then, it is undoubtedly a contributory scheme. What the UK Government does with the money is irrelevant to individual pensioners as it is outside their control.

 

I understood that the Australian government does pay the aged pension to Australians in the UK as I am sure there are people on this forum in the UK receiving it but, even if it didn't, I fail to see the relevance as any Australians in that position (and I imagine there are relatively few in number) would have no entitlement to a British state pension unless they had contributed via NIC.

 

Australia and Australian taxpayers lose out financially from the status quo so I would expect that all the intransigence originates from successive UK Governments looking to save money. I don't doubt that the beancounters have calculated the cost/savings ratio to the policy of freezing the pensions paid to certain pensioners overseas and have also determined that treating these particular pensioners equitably is unlikely to be a vote winner.

[Fisher1]

This is very important to all permanent migrants from the UK whatever their current age as everyone will eventually be entitled to their UK state pension over there.

 

I would ask the moderators to make this a "sticky thread" please!!

 

There is a point to all this discussion and it could be very useful to some people because it's not just the older generation who may be affected. My daughter was trying to work out whether it would be worth her while to continue paying UK national insurance on a voluntary basis and she had no idea that there was an issue with the level of payment - I believe that if you migrate while you are still working your UK pension is only paid at the rate applicable when you left the country. So someone who migrated in 2007 who was entitled to a 'full' pension would actually get about £90 a week instead of the current rate which is in excess of £100. I'm not entirely clear about this one so I might be mistaken ...

 

 

I wonder whether people know that pensioners must inform the DWP after twelve weeks out of the country?

 

One bright spot - you are entitled to the full current pension for any weeks you spend visiting the UK on holiday. (but your pension is then down graded to its former rate when you leave again.)

[Gbye grey sky]

There is a point to all this discussion and it could be very useful to some people because it's not just the older generation who may be affected. My daughter was trying to work out whether it would be worth her while to continue paying UK national insurance on a voluntary basis and she had no idea that there was an issue with the level of payment - I believe that if you migrate while you are still working your UK pension is only paid at the rate applicable when you left the country. So someone who migrated in 2007 who was entitled to a 'full' pension would actually get about £90 a week instead of the current rate which is in excess of £100. I'm not entirely clear about this one so I might be mistaken ...

 

 

I wonder whether people know that pensioners must inform the DWP after twelve weeks out of the country?

 

One bright spot - you are entitled to the full current pension for any weeks you spend visiting the UK on holiday. (but your pension is then down graded to its former rate when you leave again.)

 

Yes, you are mistaken about this. You receive the rate applicable at the date you are eligible and start drawing the pension, not the date you leave the country.

[winter1]

Yes, you are mistaken about this. You receive the rate applicable at the date you are eligible and start drawing the pension, not the date you leave the country.

 

 

Thanks Gbye grey skies,

Panic over! Phew Yes this is also my understanding. I received a pension forecast from the UK which also implied this. I would recommend those approaching retirement age apply to get a forecast, then you will know your starting point.

 

https://www.gov.uk/check-state-pension

 

[VERYSTORMY]

Either way, I can not see it happening - the press would crucify the government as it would read like the government were giving people outside the UK a rise while pensioners at home got nothing

[Gbye grey sky]

Either way, I can not see it happening - the press would crucify the government as it would read like the government were giving people outside the UK a rise while pensioners at home got nothing

 

:wacko:

[winter1]

Either way, I can not see it happening - the press would crucify the government as it would read like the government were giving people outside the UK a rise while pensioners at home got nothing

 

Not if they said it would produce a net saving, fortunately most UK politicians don't rely on 3 word slogans. Also UK pensioners wouldn' t get nothing they already get the rises automatically. It is about equality with those who have paid the same contributions.

[Fisher1]

Yes, you are mistaken about this. You receive the rate applicable at the date you are eligible and start drawing the pension, not the date you leave the country.

 

Thats great news, I'll tell my daughter! This illustrates my point though, about the potential usefullness of a thread like this! Thanks Gbye blue sky!

[Fisher1]

Either way, I can not see it happening - the press would crucify the government as it would read like the government were giving people outside the UK a rise while pensioners at home got nothing

 

Actually the press would be just as likely to go with the 'little old lady / war hero' stories (of which there are many) and the injustice that has been allowed to continue for decades. The people outside the UK would be given equality, that's all - by a country that claims to care about such things. Equality - imagine it, getting the same payout for making the same contributions as everyone else

[tea4too]

Either way, I can not see it happening - the press would crucify the government as it would read like the government were giving people outside the UK a rise while pensioners at home got nothing

 

Unfortunately I think you may be right @VERYSTORMY. The UK government doesn’t seem to worry too much about what is fair, or even morally just. The current course is one of reducing the welfare bill by whatever means. As a result there have been some radical changes to welfare entitlement, resulting in significant reductions of income for some of society’s most vulnerable. Over a million people were referred to a foodbank last year because they had no means of feeding themselves or their family, and hospital admissions for people suffering malnutrition have increased by 50%. Add to that the Women Against Pension Inequality (WASPI) campaign - women born in 1950s expecting to retire at 60 and not formally informed by DWP that their pension age has been extended - who so far have hit a brick wall when asking for transitional arrangements because it is not 'fiscally viable' according to the Minister.

 

These are people living in the UK and despite protests, petitions, celebrity and prominent charity support, even cross party House of Lords support, the government turns a deaf ear to them. Many WASPI women have already paid 40+ years national insurance contributions but that seems to count for nothing. Against that background I too am doubtful that any extra money will be found to finance increased pensions for expats. T x