Tag Archives: uk state pension

Are the UK pensioners finally coming in from the cold?

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.

Advertisements

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.

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

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

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

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

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.

MP wants to unfreeze state pension for Brits living in Canada

Ian Blackford

MP Ian Blackford wants to unfreeze British state pensions and also highlight good stucco work

We recently ran an article by the Canadian Alliance of British Pensioners entitled “Quirks of the UK State Pension affecting British pensioners living abroad” that really hit a nerve with our readers. It got a ton of traffic.

The main crux of the issue is the fact that UK pensioners living abroad in certain countries — including Canada — have their state pension frozen … but those living elsewhere see the amount they receive uprated annually.

We feel that’s a tad unfair.

Luckily, Ian Blackford, upstanding bloke and MP for Ross, Skye and Lochaber, is leading the charge to amend things and said, “The Government should reflect on the ‘injustice’ of the current system,” as he highlighted the strength of support for change among a large group of cross-party MPs.

The full story is covered by The National and we at Brits in Toronto think it’s a good read and an issue to keep an eye on.

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.