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.