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Canada is being left out in the cold … again

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Tracy Gray and Nigel Nelson

Conservative MP Tracy Gray (Kelowna and Lake County) and Nigel Nelson (previous chair of the International Consortium of British Pensioners)

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 Previous Chair of the (also) non profit International Consortium of British Pensioners (ICBP).

Here are his latest thoughts on British pensioners in Canada who are in receipt of a UK state pension. 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.

All it took was a referendum, three Prime Ministers and a general election to finally get Brexit over the line — well, that was easy, wasn’t it?

Now that the Brexit Withdrawal Agreement has been signed the UK is in what is called the “transition period” for the rest of this calendar year. During this period, lawmakers in the UK and the EU are agreeing the nitty gritty details of the Withdrawal Agreement.

UK pensioners living in the EU have already been promised the annual increase to their UK state pension for the next three years should negotiating bilateral agreements extend beyond the end of the transition period (if the UK wants to extend the transition period, they have until July 1 to do so).

Meanwhile, there are 498,000 pensioners globally in receipt of a UK state pension who never receive the annual increase, and their UK state pension remains “frozen” at the level first paid. 91% of these pensioners have retired to live in the Commonwealth countries of Australia (228,000), Canada (128,000), New Zealand (65,000) and South Africa (32,000). They will remain out in the cold since the UK government is not offering them bilateral agreements and so their UK state pensions remain “frozen.”

Of the pensioners in Canada who have retired and are in receipt of a UK state pension, around 56% of them live in Ontario and another quarter live in BC.

My wife and I (who both receive frozen UK state pensions) recently had the opportunity to meet with our newly elected MP, Tracy Gray. Tracy has hit the ground running in her first term as an MP and is proud to be Shadow Minister for Interprovincial Trade as well as a Member of the Canadian Branch of the Commonwealth Parliamentary Association (CPA).

Tracy is one of the most engaged MPs that I have had the privilege of meeting, both in Canada and the UK. She had a lot of questions, so it was a good job I went well prepared!

We started by looking at the number of pensioners with frozen UK state pensions who live in Canada, then in BC and finally in her constituency here in Kelowna. We discussed the unfair and discriminatory policy the UK government has — you receive the annual state pension increase if you live in the USA, but you don’t if you live in Canada, for example.

We also highlighted how much less money, over time, that state pensioners receive compared to their peers in the UK.

So, for example, if you retired from the UK to Canada in June 2001, on a full UK state pension, you would have received £72.50 per week. Today, nearly 19 years later, you would still be getting £72.50 per week, and, as a result, you would have received £26,500 (C$47,000) less than you would have received if you had remained in the UK.

Tracy was interested in knowing what reasons that the UK government has given for not uprating our pensions. We explained the reasons (or excuses!), including cost and the need for bilateral agreements, which are illogical and discriminatory.

The UK government has estimated that the cost to uprate frozen pensions globally is £600 million a year, which sounds like a lot until you realise that the government is sitting on a state pension surplus of £18 billion, and it has estimated that by 2024-25, the surplus will be an eye-watering £50 billion.

What is even more frustrating is that the UK government has recently negotiated new bilateral agreements with some EEA countries (Norway, Iceland, Lichtenstein, Switzerland and Republic of Ireland) when it has consistently said that no more agreements would be negotiated because they are too expensive; and there are likely to be more agreements to come with the remaining EU countries.

However, Commonwealth countries like Australia, Canada, New Zealand and South Africa are left out in the cold. Again.

In 2013, Freedom of Information Request No. 595 was filed in the UK, requesting clarification regarding the need for reciprocal agreements. The response from the UK government was, “Bilateral agreements are not necessary in order for pensions paid outside Great Britain and the EU to be uprated.”

It is unfortunate that MPs in Canada have been so badly advised in the past. The UK government is disingenuous in that it is still insisting that bilateral agreements are the only solution to providing state pension parity, when clearly, this is not the case.

We then covered the financial effect that the freezing of our state pensions has on the Canadian economy; the effect has been conservatively estimated to be north of half a billion dollars a year, and it impacts significantly on some of the oldest, most vulnerable and frail members of our society: seniors.

According to Statistics Canada, as at 2016, there were 828,000 pensioners living in Canada aged 65 and over on “low income,” and, according to the Canadian government, 10.3% of men and 10.8% of women aged 65 and over were living below the poverty line.

Tracy then asked how she could help, and we explained that a short-term goal was to get frozen state pensions onto the agenda at the Commonwealth Heads of Government Meeting (CHOGM) in June of this year. Other goals included bringing this to the attention of the Prime Minister, the Deputy Prime Minister, and all ministers whose departments would gain from unfreezing our state pensions.

In addition, we would like to establish a link between:
i) The Canada-United Kingdom Inter-Parliamentary Association (RUUK) and the APPG for Frozen British Pensions in the UK; and
ii) The Canadian Branch of the Commonwealth Parliamentary Association (CCOM) and the APPG.

Finally, we said that a key goal was to encourage the Canadian government to ensure that any future trade deals between the UK and Canada are linked to the unfreezing of our state pensions.

The detailed Q&A we had with Tracy can be read here. If you are receiving a frozen British state pension, or you think you will qualify in the future, and you have not met with your MP yet, we would encourage you do so (they don’t bite — honestly!), and you can read the “CABP Talking Points About Our Campaign” notes we used here.

As Tracy is now a member of the Canadian Branch of the Commonwealth Parliamentary Association, and it is due to meet soon, she will endeavour to get the frozen pensions issue onto the agenda for discussion at that meeting.

Tracy then suggested that we should look at raising a Parliamentary petition since one only needs 25 Canadian citizens and/or permanent residents to sign a petition for it to be debated in the House of Commons.

Our new MP here in Kelowna was very engaged throughout our 45-minute conversation, asking incisive questions and hopefully she will be very supportive of our cause going forwards.

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Brexit: Are we over the line yet?

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Brexit door

When one door closes another one stays closed too

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 pinning the tail on the PM, Brexit, pensioners in Canada who receive the UK State Pension, and the upcoming Canadian election. 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.

I received an e-mail from British Bloke yesterday and he invited me to write an article on Brexit — he said that I could write something for him this week, or wait until after the weekend.

Did I want to write something now (and look foolish next week) or play it safe and write after the vote. I told him that I was very busy this week, and would next week be OK?

The e-mail from him came at a timely moment as my octogenarian friend James (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 were playing pin the tail on the next PM. Even with a blindfold on, he managed to pin it on Elizabeth May three times out of five — he always has had a penchant for strong women.

I had to explain to him that Elizabeth May was not standing in every constituency, and since he lives in Ontario he will have to choose somebody closer to home …

In a nutshell, where are we with Brexit?

So far, this single issue has blown through two Prime Ministers: David Cameron and Theresa May (who submitted essentially the same “Withdrawal Agreement” to the UK Parliament four times in succession, only to have four resounding defeats, leading to her resignation) and now threatens the short tenure of Boris Johnson.

This last one seems very strange since he easily won the hearts and minds of the Conservative heartlands in becoming PM, and he has been very consistent in saying that the UK is leaving the EU on October 31, come hell or high water, with or without a deal.

But there has still been strong resistance in his own Party, never mind Opposition parties that could see and smell blood in the water already.

In order to avoid a head-on collision, Boris prorogued Parliament which was deemed illegal, then the Benn Act was passed which forbade Parliament from taking the “no deal” route, and, instead Boris would have to agree with the EU a new withdrawal date).

Boris then expelled 23 members of his own Party for voting against him (including a good friend of the “frozen” pensioners, Sir Oliver Letwin (no name dropping, but one of the cleverest men James and I have ever met)), and he has kept plugging away, even issuing a document this week entitled “No-Deal Readiness Report” and agreed a “new” deal with the EU.

This was put before the UK Parliament today (Parliament has only sat three times since 1939 on a Saturday.

What has all the fuss been about, you may ask?

Finding a solution in Ireland that suits Northern Ireland, the Republic of Ireland, the UK and the EU — an impossible task you may think. Everyone was agreed that there should not be a hard border between Northern Ireland and the Republic of Ireland (this would be like annulling the “Good Friday Agreement” and nobody wants to go there).

Boris has now agreed with the EU that the whole of the UK will leave the EU customs union. This will allow the UK to negotiate future trade deals with any country in the world. There will be different tax rates for goods that are transported to Northern Ireland, depending on where they are for use in Northern Ireland or whether they will be transported to the Republic of Ireland, and vice versa; goods that arrive in the Republic of Ireland will be taxed differently depending on whether they stay there or whether they are transported to Northern Ireland or the UK. More details of the “deal” can be found here.

Since my main interest in all of this is the impact any Brexit deal has on UK pensioners living in the EU. Essentially, if a Brexit deal is struck with the EU before the end of this month, then the UK pensioners living in the EU (of which, according to data from the Department of Work and Pensions (DWP) there were 498,000 as at February 2019) will continue to receive the annual increase to their UK State Pension (a bumper 4% next April) for the transition period which ends on December 31, 2020.

The transition period will then be used to negotiate reciprocal social security arrangements between the UK and each of the EU countries such that the UK pensioners living in the EU will continue to receive free healthcare and UK State Pension annual increases.

If the UK has not finalised a deal with the EU by October 31, then things get really interesting. Boris is adamant that the UK will leave by the end of this month, even if that means there is a “no deal,” and the Benn Act of Parliament prevents this from happening. The Benn Act is interesting because the Judiciary usually keeps its nose out of political decision making, but not so on this occasion.

So, if the UK does crash out of the EU on October 31, UK pensioners living in the EU will continue to receive the annual increase to their UK State Pension until 2023 — presumably because it will take much longer to negotiate bilateral social security agreements with each of the EU countries, since they will be really pissed off with the UK.

Also, with a “no deal” it is not clear whether the UK will still have to pay the divorce bill — which, according to the pillar of the British press, The Sun, is an amount “between £35 and £39 billion.”

It has taken a long time to get here, but how does this affect UK pensioners who have come her to Canada to retire?

According to Department for Work & Pensions numbers, there were close to 134,000 UK pensioners living here, and there will be no “bumper 4%” increase for them next April (there are over 26,000 of them who are receiving less than £20 per week (say, CAD 32), and another 50,000 who are receiving between £20 and £40 per week). A UK State Pension is “frozen” at the level at which it is first received, with no annual increase, ever.

So, by way of example, if you had retired from the UK and came here to Canada in 2001, aged 65, on a full UK State Pension, you would have received £72.50 (C$159) per week. You would still be getting £72.50 a week (C$119), but in real terms getting C$40 less per week due to the drop in the £ to CAD exchange rate. Since emigrating here, your peers back in the UK will have received £26,538 (C$47,026) more. If you are a retired UK ex-pat, this chart may help you see how much less you have received.

If you are already affected, or think that you will 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 (CABP) and they may be able to help you.

Once new bilateral social security agreements have been negotiated between the UK and EU countries, then the “frozen” pensioner action groups like CABP will challenge the UK Government on a “why them, and not us?” basis.

Finally (at last, you say), if you were one of the 3.4 million Advanced Poll voters, then congratulations. If you didn’t vote in the Advanced Poll, and you are eligible to vote, I implore you to get out and vote on October 21.

This could be a close federal election, and every vote counts. I have no idea who James will be voting for … he is playing his cards very close to his chest … but, to his chagrin, it won’t be Elizabeth May!

Where do you stand on the “frozen pensions” issue? Nigel can be reached through:

E-mail: theretiree@telus.net
Facebook: https://www.facebook.com/profile.php?id=100011398010359
Pinterest: https://www.pinterest.ca/FrozenBritishPensions/

Are the UK pensioners finally coming in from the cold?

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Anne Puckridge

Photo of Anne Puckridge by her daughter, Gillian

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 the “frozen pensions” policy. 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.

As regular readers of this column will know, I have a good friend, James (real person but name changed) who is a doting pensioner in his eighties. If I had to describe James, it would be curmudgeonly, but recently he has an almost sickly smile on his face and he is … humming (not exactly in tune, but humming nevertheless), and here is the reason why.

By way of background and, according to the latest figures from the Department of Work and Pensions (DWP), there are just over 132,000 UK pensioners living in Canada who are in receipt of a UK State Pension. The average amount received by each of these pensioners is just £42.65 per week, or, based on today’s exchange rates, $71.22 a week — some are receiving as little as £20 per week.

By contrast, there are 11.6 million pensioners in the UK and they receive an average of £145.57 per week; admittedly, there are one of two benefits (such as the disability allowance) that are included in the UK figures that UK pensioners living in Canada are not entitled to. But, as you can see, there is a huge discrepancy between the average weekly amounts received based on where you decide to retire to.

Once a pensioner decides to retire to Canada from the UK their UK State Pension is “frozen” at the level first received here. This is known as the UK “frozen pension” policy which has been in existence for over 70 years. In James’s case, he has received nearly £28,000 (over $51,000 using historic exchange rates) less than he would have received if he had remained in the UK.

James lives in Ontario, and, if he had decided to retire south of Niagara Falls (in the US), he would have continued to receive the annual increases to his UK State Pension, but, by living North of the Falls (in Canada), then he does not receive the annual increases — how can that be fair, on any level?

Anyway, today’s story is not about James, but about another of my friends: Anne Puckridge, whose picture is above.

Anne is 93 years old, and she is a former college lecturer. She lived and worked in the UK for 40 years, paying mandatory National Insurance contributions throughout this time. In 2002, aged 77 she finally retired and decided to move to Canada to be with her daughter, Gillian, and grandchildren who had moved to Calgary in the 1990s.

Sixteen years on, Anne, who served as an intelligence officer in the Women’s Royal Navy in the Second World War, is struggling to live on the frozen £72.50 a week rate she was entitled to when she moved abroad. Anne has received around £22,000 less than if she had stayed in the UK, and, in my article in August, I highlighted the fact that Vic Williams, who passed away earlier this year at the grand old age of 96, had received £67,000 (over $129,000) less than his peers in the UK.

Anne now feels that she will be forced to move back to Britain, because her pension will no longer cover day-to-day expenses and she is increasingly reliant on her daughter to get by.

“It’s the small things, and the injustice, that is really getting to me. I value my independence, but I can’t go on living on the breadline and I don’t want to inflict this on my family. As well as ever-increasingly poverty, I feel a sense of stress and shame, which is affecting my health,” she says.

Anne used to be able to go out to lunch and afternoon tea with her friends, but now she must weigh up the cost of this versus spending the same money on Christmas gifts for her grandchildren.

Last year, in a debate in the UK House of Commons on Pensions Uprating, when referring to Anne, Mhairi Black, MP, Scottish National Party had this to say:

“We are saying, ‘We’re not going to give you that money, but you can go and live abroad, make yourself ill through poverty, worry and the stress of having to come home. When you are forced to return to Britain, don’t worry, we’ll foot the bill for the NHS and everything else.’ The argument about cost does not stand up — costs will increase when pensioners who have been made ill through stress or whatever, have to come back in order to survive.”

The cost to uprate the State Pension worldwide has been estimated by the UK Government to be £600 million, and that the country cannot afford it. However, what they forget to tell you is:

1. According to the Office of Budget Responsibility (OBR), each pensioner living outside the UK saves the Treasury around £1,500 per pensioner per year. There are 1.2 million UK pensioners living overseas. This means that the UK Government is saving £1.8 billion off the backs of the most vulnerable people in society today – pensioners.

2. All National Insurance Contributions are paid into the National Insurance Fund (NIF), and the State Pension is paid out of the same fund. According to the latest set of NIF accounts (year ended March 31, 2018), there is currently a balance of £24.2 billion (page 13) in the NIF. By law, there must be a “running balance” (or “float”) equal to 1/6th of the Annual Payments from the NIF account (£101.5 billion) which is £16.9 billion, which then leaves an excess of £7.3 billion. Why can the uprating amount of £600 million come from this account? It is also interesting to note that the excess has grown by over £2 billion in the past 12 months. As an aside, this balance of £24.2 billion is used as a UK National Debt offset, rather than distribute it to those who are in most need.

So, when the UK Government says that they cannot afford it, what they are really saying is that the over 520,000 UK pensioners living in “frozen” countries like Canada and Australia aren’t worth it, even though many, like Anne, fought for their country. In addition, because UK pensioners living in this country do not receive the annual increase, the Canadian government is subsidizing the UK government by providing the extremely poor with cash and housing benefits, which is coming out of taxes you and I pay. In addition, it has been estimated that because these pension increases are not being received by UK pensioners living in Canada, it is costing the Canadian economy more than half a billion dollars a year since, typically, pensioners are spenders and not savers.

Just these past few days, Anne and her daughter Gillian have flown to the UK. The International Consortium of British Pensioners (ICBP), which is half owned by the Canadian Alliance of British Pensioners (CABP) has recently set up a new petition, where Anne is our campaign “poster girl.”

If you are a “frozen” pensioner, or if you hope to receive a UK State Pension one day, I would ask you to please check out this petition, add your own name to it, and send the link to everyone in your contact list, both here in Canada and in the UK; this is a global issue. So far, the petition has attracted 218,000 signatures and Anne will be on hand in the Palace of Westminster to answer questions that MPs may have. At the same time, the Chairman of the ICBP will be presenting the petition to 10 Downing Street.

Anne has had a lot of attention recently (which she absolutely hates!), as articles have appeared on both sides of the pond. In the UK, the FT Adviser wrote an article, as did The Guardian and Daily Express, and here, in Canada, the BBC (USA and Canada) and the CBC both have articles on their websites, and there is also an article in the International Adviser.

In addition, Brits in Toronto (hello!) and emigrate.co.uk have also picked up the story.

If there are any questions you have relating to the UK State Pension, you can call the CABP toll-free on 1 888 591 3964 or contact info AT britishpensions DOT COM.