Tag Archives: international consortium of british pensioners

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/

Advertisements

Ouch! How Brexit is hurting UK pensioners in Canada

Pensions

File your pension somewhere safe, like in a paper folder with “Pensions” written on it or something

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.

I was talking with my good friend James (real person, but name changed) the other day and he wasn’t very happy. But first let me tell you a little bit about James. He has spent his whole retirement living here in Ontario — he is 83 and first started drawing his UK State Pension in 1998.

At that time he was paid £64.60/week, which in those days meant he was getting about $150/week; this was when gas cost 52 cents/litre, and a loaf of bread cost just $1.30.

Today, because of the UK’s “frozen” pension policy, James is still getting £64.60/week, which immediately after the Brexit vote converted to $110/week ($40/week less than he was getting in 1998) — the British pound instantly fell 18% against the loonie. Meanwhile the cost of gas has gone up to 94 cents/litre ($1.15/litre in Western Canada), and a loaf of bread is now nearly $3. How can anybody be expected to live on 110 bucks a week?

James’ UK State Pension has fallen in real terms because the UK Government steadfastly refuses to annually uprate pensions for UK pensioners living in Commonwealth countries like Canada and Australia. The rate of inflation in Canada has increased and “frozen” pensioners continue to lose pace with the cost of living. How can that be right?

You can imagine what James said to me the other week when I told him that if he had retired to the southern side of Niagara Falls, in the USA, rather than the northern side in Ontario, or even if he had stayed in the UK, then he would have received about an extra $46,000 in pension money since he retired. What he said to me cannot be printed here!

James is not the only UK pensioner who is feeling the pinch. The CBC Vancouver radio station recently contacted the CABP as part of its research on the immediate effect of Brexit on UK pensioners living in Canada.

The UK State Pension is paid every four weeks and many pensioners cannot afford to pick and choose when they convert their sterling into Canadian dollars. They need the money as soon as possible because for some it is their only source of income. This means that they are hostages to fortune with regard to exchange rates — they have to take what is available on the day.

The graph below shows the fall in the £ against C$ over the last three months, especially the dramatic fall the day after the Brexit vote:

These rates are mid market rates at best; the rate received by pensioners is often a couple of cents less than shown in the graph above. This has hit UK pensioners living in Canada very hard and it’s also a similar story in Australia.

Brexit will have a significant impact on the “frozen” pensions issue. The UK is only legally obliged to pay the annual increase to pensioners who live in the European Economic Area (EEA), Gibraltar or Switzerland or countries that have a social security agreement with the UK that allows for cost of living increases to the State Pension. The EEA includes all EU countries plus three other countries: Iceland, Liechtenstein and Norway.

There are over 400,000 UK Pensioners living in the EU and over half of them live in EU countries that had pre-existing (i.e. prior to them joining the EU) social security agreements with the UK, which may now come back into force post-Brexit.

However, the other half live in EU countries where, like Canada, there have never been social security agreements that facilitate annual uprating of the UK State Pension.

If the UK is able to negotiate to join the EEA, like Norway — without being part of the EU — then one presumes annual uprating will then be restored to all EEA/EU countries.

However, one of the tenets of the EEA is free movement of people and so it is not clear how the UK would be able to join EEA as opposition to free movement of people is thought to be the main reason for the “Leave” vote of Brexit.

Regardless, the UK will not be able to ignore the new “frozen” pensioners in the EU. There are over 150,000 UK pensioners living in Canada who are hoping that whatever the UK Government does for the new “frozen” pensioners in the EU then they will do the same for those living everywhere in the world.

There can be no just or legal basis for treating the EU “frozen” pensioners any differently from the other “frozen” pensioners around the world! It is time to bring this unfair and immoral practice to an end, and then maybe my friend James can smile again.

Watch this space (as well as the CABP website and Facebook page) for further updates, both on Brexit and on how my friend James is managing to make ends meet.

On a separate issue, the CABP has recently been talking to the folks at CARP with a view to tackling some common issues that we have.

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