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Brexit update: “Nothing is agreed until everything is agreed”

Brexit update

We’ll meeeeet again, don’t know wherrrre, don’t know whe — oh, sorry, we probably won’t

Nigel Nelson is a regular contributor to Brits in Toronto, and is a member of the non-profit Canadian Alliance of British Pensioners (CABP), and Past Chair of the (also) non-profit International Consortium of British Pensioners (ICBP).

Here’s his latest thoughts on Brexit and pensioners in Canada who receive the UK State Pension.

I was recently speaking to my octogenarian friend James the other day (you may remember that I first introduced you to James in the Ouch! How Brexit is hurting UK pensioners in Canada and in the later article James and I go to London), and I said to him what a quintessentially European phrase, “Nothing is agreed until everything is agreed” really is, although its origins seem to come from the World Trade Organisation (WTO) in 2005.

What has this got to do with the UK State Pension which is what James and I always end up talking about? You see, he is a British military chap and he is usually found frothing at the mouth because he has found out that if he had stayed in the UK rather than retiring here to Canada he would be more than £31,000 better off in terms of his UK State Pension; using historic exchange rates, this converts to over $56,000 — not a trifling amount by any means.

If James lived south of the Niagara Falls (in the US) he would have been getting the annual increases to his UK State Pension. Instead, he chose to live north of the Falls, here in Canada and he hasn’t been getting the annual increases, and his UK State Pension has been “frozen.” How unfair is that?

James has been reading about Brexit and that got him thinking about UK pensioners living in Europe. There are 496,000 pensioners living in Europe who are in receipt of a UK State Pension:

Pensioners stats

Source: Dept. of Work and Pensions

Once the UK drops out of Europe, then, technically, the UK government no longer has a legal obligation to continue giving these pensioners the annual inflationary increase. This year the increase is 3%, so, for anyone getting their UK State Pension based on the pre-2016 Pensions Bill, this means an increase of just over £190 per year. Those who have retired after April 2016 will receive up to an estimated £260.

These pensioners are not happy about the possibility of them losing the annual increase, and there are a number of European pension lobby groups who are petitioning the UK Parliament.

The European Parliament and the UK Government have agreed that the UK government will continue to “export benefits” which includes the annual increase to the UK State Pension, and that has been drafted into the Withdrawal Bill which is currently before the UK Parliament. This is fine as long as the Withdrawal Bill is enacted.

However, Brexit negotiations are currently getting bogged down with negotiating a trade agreement. If the negotiations are not all completed by March 27, 2019, then the UK could fall out of the EU, and the Withdrawal Bill could be in limbo. So, where would this leave the pensioners living in Europe who receive a UK State Pension?

There are 540,000 pensioners living in 120 countries who do not receive the annual increase to their UK State Pension (larger image):

Countries affected small

Source: International Consortium of British Pensioners

As you can see, Canada is one of those countries (where there are 144,000 “frozen” pensioners). The pension lobby groups that I represent are watching very carefully to see what Brexit delivers in terms of the annual UK State Pension increase.

Technically, the pensioners living in Europe will be joining all the other “frozen” UK pensioners in the world, and the number would then swell to over one million unhappy pensioners — not a pleasant sight!

The UK Government has said that as part of the Withdrawal Agreement, they will negotiate “bilateral agreements” with European countries such that the pensioners living in Europe will continue to receive their annual UK State Pension increase. What James and many others are asking: “Why them, and not us?”

If you think that you are going to be affected by the UK “frozen” pension policy, and would like to help us in our fight, please check out the Canadian Alliance of British Pensioners and they may be able to help you …

Where do you stand on this? Nigel can be reached:

E-mail: nigel AT britishpensions DOT COM

Twitter: https://twitter.com/CABP_News

Facebook: https://www.facebook.com/profile.php?id=100011398010359

Instagram: https://www.instagram.com/nigelnelson7150/

Pinterest: https://www.pinterest.ca/nigelbritishpensionscom/

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James and I go to London

james-uk

The “constructive boardroom meeting” stock photo actor auditions were very competitive this year

(London, England that is, not London, Ontario. Well played.)

Nigel Nelson is a regular contributor to Brits in Toronto, and is a member of the non-profit Canadian Alliance of British Pensioners (CABP), and a Director of the (also) non-profit International Consortium of British Pensioners (ICBP).

Here’s his latest thoughts on Brexit and pensions in Canada. All views are the CABP’s and Brits in Toronto does not endorse them and is not held liable in any way. As always, do your due diligence.

In my previous article, I introduced you to my friend James (real person, name changed). James is an octogenarian who emigrated from the UK many years ago, and retired in Ontario in 1998. He is what is known as a “frozen” pensioner.

Now, I know he lives in a cold part of Canada, but that is not why he is “frozen”! No, James is one of 144,000 UK pensioners living in Canada who do not receive an annual increase to their UK state pension — whereas pensioners living in the UK, the European Union, and several disparate countries around the world do receive the annual increase.

This is known as the UK “frozen pension” policy. He still cannot understand why, if you live south of the Niagara Falls (in the US) then you get the annual increase, but if you live 500 yards north of the Falls (in Canada) then you don’t.

When I showed him the “Pension Erosion” chart (see below), then he marked on it (in blue) the year in which he retired, and then realized that he had received £25,000 less than his peers in the UK … even though he has made the same National Insurance Contributions as them, and had earned a “full” UK State Pension.

uk-state-pension-erosion

James marked the blue bit

So, James packed his bags, said goodbye to his wife and set off for the UK — and I said goodbye to my wife and went with him. Somebody had to carry his bags!

james-uk

“G-4?” “Hey! You sunk my battleship!”

In the space of eight days, we spoke with 24 Parliamentarians (Members of Parliament and Peers), the UK media, and several other pension organisations. We showed everybody the Pension Erosion chart, and there came a new realization of just how badly UK pensioners living abroad in countries like Australia and Canada are being treated by the UK government.

For example, for those UK pensioners living in Canada who are 85 or over, the accumulated “Pension Erosion” amounts to £669 million. For those UK pensioners living beneath the poverty line, the Canadian government subsidizes them, which comes out of Canadian taxpayers’ pockets, rather than the UK government’s. How can that be right, or fair?

What we learned from our trip to London is that the main issue challenging UK Members of Parliament is Brexit.

Nobody knows what is going to happen with respect to the 488,700 UK pensioners living in the European Union (EU). The table below shows the number of UK pensioners living in each country within the EU.

uk-pensioners-living-in-the-eu

That’s a lot of UK pensioners scattered across the EU

It is not clear whether these pensioners will continue to receive the annual increase to their UK State Pension once the Brexit negotiations have been completed, since the UK government only increases UK State Pensions annually where, “they are legally obliged to.”

Post-Brexit, if the UK is neither part of the EU or the European Economic Area (EEA), then the UK government is no longer legally obliged to annually increase the UK State Pension for UK pensioners living in the EU.

The Telegraph reported in May 2016 that over a 20-year-period, UK pensioners living in the EU would be, “£50,000 poorer.”

Many of the UK pensioners living in the EU fear that they will be a “pawn” in the Brexit negotiations, and their annual UK State Pension increases will be a “bargaining chip.” If this is the case — and their UK State Pension is no longer increased each year — then, for many of them, they will have no option but to sell up and return home to the UK.

If all UK pensioners living in the EU were to return home to the UK, then the additional cost to the NHS has been estimated to be £2 billion per year.

In talking to one MP, we found out that the rural areas may offer the cheapest housing but these houses are in remote locations, far away from medical facilities. NHS hospitals, which are already stretched, will become even more so due to inadequate staffing levels.

Every day seems to bring yet another story of how the UK NHS system is one step closer to breaking point. Pensioners tend to be the greatest users of medical resources, so, if they were to return (from the EU) in significant numbers, they would stretch the NHS to beyond breaking point.

James and I came back from London with new vigour to try and help the UK pensioners living in the EU, by setting up a new petition. We wanted to let Brits in Toronto readers know that the International Consortium of British Pensioners have developed their own petition.

This petition is designed mostly for the nearly half a million UK pensioners living in the EU — but also applies to the 144,000 UK pensioners living in Canada who already have their UK state pension “frozen” — who may lose the annual indexation to their UK State Pension as part of the Brexit negotiations.

We also ask your readers to review the House of Commons Petition. British citizens and UK residents can sign this petition, so please sign this if you can, and ask your family and friends in the UK to sign this petition as well. There are currently just over 4,000 signatures. At 10,000 signatures, the UK government will respond, and if there are 100,000 signatures, then the UK government will debate the petition. Please sign this petition before it expires on 25th January 2017.

We would also like to encourage readers to join in the battle and become members of the Canadian Alliance of British Pensioners.

We would also like to wish all Brits in Toronto readers a wonderful holiday season and a healthy and prosperous 2017.

Nigel can be reached via e-mail at nigel AT britishpensions DOT COM.

All are welcome at the CABP AGM on June 18, 2016

Old people silhouette

Are you an ex-pat pensioner living in a black hole that sucks in all light? Help may be at hand from the CABP

Brits in Toronto has been following the issues around freezing of the UK State Pension for ex-pats living abroad, especially in Canada.

We also featured a very popular guest article by Nigel Nelson, a member of the Toronto-based non-profit Canadian Alliance of British Pensioners (CABP).

Nigel contacted Brits in Toronto again to let us know about the CABP Annual General Meeting this Saturday, June 18, at the Sir John Colborne Recreation Centre for Seniors, 1565 Old Lakeshore Road West, Oakville, Ontario, L6L 6N1.

The meeting starts at 2:00 p.m., but doors are open for registration at 1:00 p.m. Everyone is welcome.

Nigel writes, “If you’re not a member of the CABP, don’t worry, you’ll still be made to feel welcome and, if you think that this illness, the ‘frozen pensions syndrome’ needs curing, it would be an excellent time to sign-up and help bring this social injustice to an end.

“There will be plenty of opportunities for you to ask about the impacts of the new Single Tier State Pension that came into force in April 2016, which is a new fever that future pensioners might catch!”

So, if you feel strongly about this issue and want to have some say, go along to the AGM, meet Nigel and find out more information.

Quirks of the UK State Pension affecting British pensioners living abroad

Canadian Alliance Of British Pensioners

Got some UK pension system questions? Give ’em a bell on the dog and bone for a chinwag

This is a free, non-paid-for guest article by Nigel Nelson, a member of the Toronto-based non-profit Canadian Alliance of British Pensioners (CABP). All views are the CABP’s and Brits in Toronto does not endorse them and is not held liable in any way. As always, do your due diligence.

Have you ever worked in the UK? Did you make National Insurance contributions (NICs) when you worked? Depending on the number of years of NICs you have to your credit you might qualify for a British state pension. However, if you qualify for a UK State Pension, as long as you live in Canada, you will not receive the annual inflationary increase as given to pensioners in the UK, EU and an obscure list of countries. This is known as the British “frozen pensions” policy.

The Canadian Association of British Pensioners was established in 1991 to help British pensioners living in Canada navigate the UK State Pension system by providing information with respect to eligibility for a British State Pension; keeping current with the successive changes which have been made to the UK State Pension system and lobbying the UK government for parity with all British pensioners living overseas. We can answer your questions about the UK pension system.

CABP is a registered non-profit organisation and all of the directors are volunteers, as are most of the people who work out of the office in Toronto. Anyone who has worked in the UK and has paid National Insurance Contributions may well qualify for a UK State Pension.

Those people in Canada look to organizations like the CABP, which has the experience and understanding of the UK pension system, for advice. There are over 5,000 members in Canada who currently get this support.

According to the 2011 Canadian National Household Survey, there were 125,000 British immigrants over the age of 65 living in Ontario and another 65,000 in the 55-64 age category. In Toronto alone, there are 43,000 and 24,000 respectively.

Many of these immigrants will qualify for a British State Pension, but may not know that; and they’re probably unaware that, once they start to receive a UK State Pension, they will never receive any of the annual increases enjoyed by their peers in the UK … even though they will probably have paid the same level of National Insurance Contributions.

Successive UK governments for over 70 years have followed this “frozen pensions” policy. The policy is based on outdated logic and the UK government has now conceded that the only impediment to eliminating the “frozen pension” policy is cost, accompanied by the “political will” to do so. There are over half a million “frozen” UK pensioners living abroad — 90% of these “frozen” pensioners live in Commonwealth countries such as Australia (45%) and Canada (28%).

CABP provides support to UK pensioners in Canada and they work tirelessly in trying to abolish this unfair and immoral policy. For example if you live on the American side of Niagara Falls you would receive the annual increase; if you live on the Canadian side of the Falls you wouldn’t receive the increase.

If you had retired in 1980 with a full UK State Pension it was just £27.15 per week — slightly over $50 in today’s money. Could you live on that? There will be cases where members, who do not have the full number of years of National Insurance contributions, are living on less.

A UK pensioner retiring on a full State Pension in 1980 will have been underpaid by £80,000 up to the end of April 2016. Today’s UK State Pension, at £119 per week, is 440% more than it was in 1980! CABP believes that this is unfair, discriminatory, and immoral, and they have been campaigning since 1991 to get this policy changed. In comparison, the CPP payment is payable to Canadians globally and is adjusted annually wherever the Canadian pensioner chooses to live.

Sadly, some of these pensioners even have to go back “home” to the UK since they can no longer live on their “frozen pension.” This is causing them considerable angst — leaving behind their loved ones, having to make travel arrangements, and finding accommodation when they get back.

For example, last year alone, there were 2,000 UK pensioners who returned back to the UK, and, for many of them, it will be because they could no longer afford to live in their country of choice, based on the state pension they were receiving. Any returning pensioner to the UK has their pension uplifted to the current rate — the same as all other pensioners living in the UK. They also qualify for other social welfare benefits.

Currently, the UK Treasury saves over £4,300 per year for each pensioner emigrating, so, for returning pensioners, it adds to UK Treasury costs. Given these numbers, you would think that the UK Government would be encouraging pensioners to leave rather than putting barriers in their way.

The good news is that there is a glimmer of light at the end of the tunnel. A proposal, with respect to amending the “frozen pension” policy has been submitted to the Cabinet Office in the UK Parliament in London. The proposal is currently under consideration, but is by no means a “done deal” … and so we must keep up the campaign.

If you would like to find out more about your British Pension rights and how you will be affected by a “frozen pension,” or, you would like more general information, you can check out the CABP.

CABP is based in Toronto and can provide a wealth of current and accurate information with respect to British pensions. Contact information is on the website.