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Things the UK government should be ashamed of: Parts I-III

UK government

Grrrrr! We’re so bloody angry!

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.

Things the UK government should be ashamed of – Part I

Millions of you out there viewing this blog (I wish!) will have read several outspoken articles that I have written on the UK government’s “frozen pensions” Policy which has been in existence for over 70 years now.

If you live in one of 120 countries (of which Canada is one) your UK State Pension is “frozen” at the level at which it is first received, and you will not receive the annual increases. This affects the over 133,000 recipients of the UK State Pension who live in Canada. The UK is the only country in the OECD (out of 35) that operates this immoral and discriminatory policy. The Canadian Alliance of British Pensioners (CABP) has been lobbying the UK government for over 25 years in an attempt to annul this outdated policy.

I would like to tell you about Vic Williams, one of the strongest CABP supporters, who died a couple of months ago at the tender age of 96. I know that this blog normally tells you about successful Brits living in Ontario. As Vic lived in Mississauga, I think that he would have counted.

Vic Williams

Vic Willams. Photo courtesy of Wendy Williams

Vic passed away at the grand old age of 96, and he was of the old school. Born in the East End of London he was a true Cockney, and, like all Cockneys he was a born storyteller, entertaining all who new him with fascinating (and often hilarious) stories of his rich life, which began in London England, where in his youth he was a talented soccer player.

His service as a young man in the Royal Navy on the aircraft carrier HMS Formidable took him around the world. He joined up because “it was the right thing to do.”

Back in post-war London Vic met Helen, and they were married in 1954. They emigrated to Canada in 1956 and settled in Mississauga in 1958, where their family of three soon grew to five. Vic worked for Alcan for over 25 years, rising to a management position, and in the process teaching his children the values of diligence and hard work. Despite the Cockney accent that never quite left him, he was a proud Canadian, camping with his family and exploring Canada with Helen.

In retirement, Vic and Helen became founding members of the Probus Club of Mississauga Centre which provided them with many opportunities to enjoy activities with new friends. Vic was known as an avid horse-racing enthusiast and a prudent handicapper, who usually came out as a winner upon placing a bet. A generous man, Vic often gave his winnings to family and charities. As a proud WW II veteran, he was a member of the Royal Canadian Legion, participating in Remembrance Day ceremonies each year.

Until recently, a fiercely independent Vic continued to live in the Mississauga house that has been the family home for almost 50 years. Vic was always proud of the fact that, in his youth, he knew Michael Caine. Even when he was in his early nineties, he was still able to attend the CABP AGM’s where I had the honour of meeting him.

In 2013, Vic, in conjunction with the CABP made a Remembrance Day video for the then Prime Minister, David Cameron beseeching him to revoke the unfair, immoral and discriminatory “frozen pensions” policy. I am not sure if Mr. Cameron ever saw the video.

Because of the UK government’s “frozen pensions” policy, UK pensioners living in Canada who retired at the same time as Vic, and who have earned a “full” UK State Pension will have received more than £67,000 less than their peers in the UK, even though they will have made the same level of National Insurance contributions. In Canadian Dollar terms (using historic exchange rates), this amounts to close on CAD 129,500, which is not chump change and is a life-changing amount for many older pensioners who may have become dependent on the Canadian government for handouts and subsidies.

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 Government of Canada, as at 2016, 10.3% of men and 10.8% of women aged 65 and over were living below the poverty line — in terms of UK pensioners, this means over 14,000 of them are living below the poverty line.

According to the UK’s Department for Work & Pensions (DWP), there are 38% of UK pensioners living in “frozen” countries (like Canada) who are receiving a UK State Pension of less than £20 per week (CAD 32 per week), at current exchange rates. Who can live on this?

Things the UK government should be ashamed of – Part II

If you are a regular follower of this column, you will know that I have a good friend, James (real person but name changed) who is a doting pensioner in his eighties (https://britsintoronto.com/2018/03/19/brexit-update-nothing-is-agreed-until-everything-is-agreed/). I usually find him chortling in his G&T, but times are so hard that he has run out of gin. He recently went down to his wine cellar to get a bottle of claret, but he has also run out of that. Times are hard. Things haven’t been helped by what is happening (or not happening) with Brexit.

With the UK Parliament in recess, and no clear way forward in terms of the UK divorcing the EU, it is UK pensioners living overseas who continue to suffer. When the Brexit referendum result was announced there was an immediate fall in the exchange rate:

Exchange rate small
(Larger version here.) Source: https://www.currenciesdirect.com/en/currency-tools/currency-charts

All UK State Pensions are paid in GBP. Most pensioners are living pension cheque to pension cheque. This mean that they are hostages to fortune when it comes to exchange rates, and have to take the rate on the day that they receive their pension cheque.

According to the latest DWP figures, the average UK State Pension received by pensioners living in Canada is just over £41 per week. At the beginning of June 2016 (just before the Brexit referendum), this would have been worth nearly CAD 80 per week. By the middle of July (just after the Brexit referendum) this would only be worth CAD 70 per week. The longer that the UK government prevaricates over the Brexit deal (or no deal) the more jittery the currency exchange markets become, and this means the UK pensioners living abroad will be worse off.

In fact, my friend James receives a smaller UK State Pension today in CAD terms than when he first retired. When he first retired in 1998, he was receiving £64.70 per week. The exchange rate in those days was 2.37 CAD to the pound, so he was receiving CAD 153 per week. Today, he is still receiving £64.70 per week, but this is only worth CAD 109 per week — so he is receiving a staggering 29% less now in real terms than when he first retired.

Meanwhile, according to the Bank of Canada, inflation has risen by over 46% since 1998, when James retired. Whilst the UK government cannot be held completely responsible for the changes in exchange rates, it is impossible for UK pensioners living in “frozen” countries to budget when their income base is in decline, and inflation is rising at an average rate of nearly 2% a year (at least, in Canada).

However, the annulment of the “frozen pensions” policy is entirely in the hands of the UK government, and the fund from which the State Pension is paid (the National Insurance Fund) currently has a £6 billion surplus. Meanwhile, to uprate the UK State Pension for all pensioners living in Canada would cost a meagre (in comparison) £159 million per year. Hopefully, Brexit may force their hands, but that is a story for another day.

In the meantime, it is enough to drive James and his pensioner friends to drink … except they can no longer afford it. The gin is all drunk, and so is the wine. All that is left for them is to try their hand at homebrewing.

Things the UK government should be ashamed of – Part III

Prior to the General Election called by Theresa May in June 2017, the then Pensions Minister, Richard Harrington had asked for a meeting with the International Consortium of British Pensioners (ICBP) — 50% owned by CABP. The CABP flew a Board Member to London for the meeting. Mrs May called a General Election before that meeting could take place, and the meeting was called off at the last minute.

After the General Election, the Pensions Minister role was downgraded to the Parliamentary-Under-Secretary role, and Guy Opperman was appointed. Since then, there has been no contact. There was no apology, no offer to reimburse the ICBP for the costs that they had incurred – nada.

Yet another reason why this current UK government should be ashamed …

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.

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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. 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 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

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