The date has been set for a landmark debate and vote in UK parliament, to remove regulations that enforce the ‘freezing’ of pensions of UK expats, in a number of overseas jurisdictions including Australia, Canada and South Africa.
In the House of Commons, on 20 April, MPs will have up to three hours to debate a motion calling for the Uprating Regulations which freeze pensions to be withdrawn and will follow with a vote on the matter.
The call for a debate on the Social Security Benefits Uprating Regulations 2017, which officially excludes some overseas pensioners from getting an annual increase in their state pension, has been sponsored by Labour leader Jeremy Corbyn and backed by the Tory MP and longtime campaigner against frozen pensions Sir Roger Gale.
The Scottish National Party’s Ian Blackford, Greg Mulholland of the Lib Dems, Sammy Wilson of the DUP and Caroline Lucas of the Greens have also back the the campaign.
‘Detrimental effect’
The document that was delivered prompting the 20 April debate and vote, read: “This House notes the detrimental effect that the Social Security Benefits Up-rating Regulations 2017 will have on the lives of many expatriate UK citizens living overseas with frozen pensions; and insists that the government take the necessary steps to withdraw those regulations.”
The debate will be the first parliamentary occasion that the recently appointed minister for pensions, Richard Harrington to publicly engage with the issue of frozen pensions.
If the vote is in favour of removing the Uprating Regulation and is then formally enforced then, as reported, more than half a million expats living on frozen state pensions would get a 2.5% hike in their pension payouts bringing them in line with other retirees.
State pensions can become fixed when you first retire or move abroad if you decide to live in certain countries, including Canada, India and Australia, but not in others, where the amount that they receive is uprated annually, as it is in the UK.
555,000 Britons affected
The pension freeze applies to an estimated 550,000 Britons who live in one of the 120 countries that do not have a reciprocal agreement with the UK requiring that uprating takes place, and campaigners estimate that more than half of expat pensioners do not get an increase.
As reported, Brexit has heightened political interest in frozen state pensions, because another estimated 472,000 people, who have retired to other EU countries, currently get automatic annual increases, but it is unclear whether the UK will strike a deal for this to continue after its departure.
Labour leader Jeremy Corbyn, pictured left, said in a statment: “This is a chance to make an historic change to our pension system and end the arbitrary discrimination against some British pensioners living overseas.
“It is contrary to natural justice for some pensioners living abroad to be left behind while others have their pensions increased in line with inflation.
John Markham, chairman of the International Consortium of British Pensioners (ICBP), said on the organisations website that Labour’s support represented a “significant step” in the campaign to unfreeze expat pensions.
‘Dirty secret’
“Frozen pensions are the dirty secret of successive governments, who have been content to ignore pensioners they felt were out of sight out of mind, regardless of the implications,” he said. “Many expat pensioners are just as reliant on their state pensions as those living in the UK. Freezing their pensions leaves recipients with dwindling incomes, deprives them of their prized independence and leaves many in dire poverty towards the end of their lives.
“I am glad this national embarrassment is finally getting the attention it deserves.”
According to various reports, the Department for Work and Pensions has estimated that the unfreezing state pensions for relevant expats would cost more than £500m a year.
Brexit
Brexit heightened political interest in frozen state pensions, because the 472,000 people who have retired to other EU countries currently get automatic annual increases, but it is unclear whether the UK will strike a deal for this to continue after its departure.
That means elderly EU expats would join the other 550,000 retirees whose payments no longer increase in line with the state pension triple lock – whichever is the highest of inflation, average earnings or 2.5% – as they do if you stay in or return to the UK.
According to the ICBP website, more than 95% of the current “frozen” pensioners live in Commonwealth countries, mostly in Australia, Canada, South Africa and New Zealand, but also India, Pakistan, Bangladesh, many Caribbean islands and all African countries.
