Half of the more than one million British pension recipients living abroad are not entitled to yearly cost of living increases. Calling for pension justice, 220,000 expat pension protesters have signed a petition for the government to scrap this longstanding rule.
Depending on where a UK expatriate settles, the pension may be indexed, leading to increases in value each year to keep up with the rising cost of living.
Some of the countries where the pensions are indexed include most of Europe, the US, the Philippines and Barbados. If a country has a social security agreement with the UK, this likely means the pensions will be indexed.
However, Canada, New Zealand, Australia and South Africa, among others, are some of the Commonwealth countries where the pensions do not see an annual bump.
What this has meant to these pensioners is that someone who retired when the basic rate was £67.50 a week in 2000 would still get that, rather than the £164.35 received by everyone else now.
144,000 UK pensioners in Canada affected
The frozen pension affects about 144,000 UK pensioners living in Canada, says the Canadian Alliance of British Pensioners, a group advocating for indexed pensions.
Every 28 days, Rodger gets about 117 pounds although the Canadian value fluctuates because of currency changes, Canadian news outlet CBC reports.
In a statement, the UK’s Department for Work and Pensions said its policy on pension indexing has remained consistent for about 70 years.
“If all UK state pensions paid overseas were up-rated to the level payable in the U.K. this would cost an extra £0.5 billion a year,” it told CBC.
93-year-old expat Anne Puckeridge flew to London from Canada to hand the 220,00 signature petition in at Downing Street to highlight the plight of retired Brits abroad.
Puckeridge, a WW2 veteran, left the UK for Canada 17 years ago. Her state pension payment was £72.50 a week and has stuck at that rate since as Britain does not index link state pension payments for all expats.
“My mother served her country, then she spent the rest of her working-life paying National Insurance. She expected, like the rest of us, that when it was time to retire she would be able to access the pension she had paid into.
“But now in her 90s my mum, who does all her own shopping and cleaning, has to think twice about making a trip to the supermarket, or before buying Christmas gifts for her grandchildren,” the petition reads.
Since moving to Canada, Puckeridge reckons she has lost £22,000 in payments compared to an expat pensioner with an index-linked state pension.
Living in wrong country
“Some survive on as little as £30 per week and in some cases they are now receiving less than when their pension first started. How can this be right?” said the International Consortium of British Pensioners.
“Across the world, hundreds of thousands of British state pensioners are being discriminated against simply because they retired to the wrong country. There are 120 frozen countries of which 18 have 1,000 or more frozen UK pensioners living there.”
The consortium believes more than 500,000 state pensioners are impacted by the government policy.