State Pension  

Thousands sign pensions petition

Thousands sign pensions petition

A petition urging the government to allow policy increases for expats with 'frozen' pensions has been signed by more than 196,000 people.

Currently the majority of pensioners living in the UK have their state pension increased according to the triple-lock principle, by a minimum of 2.5 per cent, the rate of inflation, or average earnings growth, whichever is the highest.

But the same applies only to expat pensioners living in certain countries, such as the US, all European Union countries, Barbados, Bermuda and Israel.

Pensioners living in countries such as Australia, Canada, New Zealand and South Africa have had their state pension frozen at the value that it was in the year they left the UK.

According to the all-party parliamentary group on frozen British pensions, 550,000 British pensioners, equating to 4 per cent of all recipients of the state pension and half the pensioners living overseas, are currently adversely affected by the government’s frozen pension policy.

The petition was created by the daughter of one of these pensioners, Gillian Mittins. She said that her mother, a 93 year-old WW2 veteran, served her country and spent the rest of her working-life paying National Insurance before moving to Canada to be close to her family at age 76.

Ms Mittins said: "If mum had stayed in the UK she would be receiving £126.95 a week. Instead she is punished for living with a pension stuck at £72.50 for the rest of her life.

"For my mum a frozen pension means having to choose between a muffin or half a dozen eggs at the checkout, but for others the difference can mean poverty. 

"Many vulnerable overseas pensioners have been forced to return to the UK, leaving their support network and family behind. It’s humiliating. And just plain wrong."

FTAdviser reported in July that the government has no plans to change its current policy on this matter, as it would cost more than £500m per year to be corrected.

In a written answer to Parliament, Guy Opperman, minister for pensions and financial inclusion, stated this was the cost the government would have to pay if all pensions in payment overseas were increased to current UK levels.

This figure would increase further in future years, he added.

Gem Durham, independent financial adviser at Obsidian, said the subject was "contentious".

She said: "Whilst I understand Ms Mittins' disappointment regarding her mum's situation, the fact is that pensioners who choose to continue to live in the UK continue to contribute to the country's economy - almost every time they make a purchase they will pay VAT and their money will go towards business within the UK.

"The cost of the state pension is an ongoing problem, set to potentially get worse. While this is being addressed for the future through auto-enrolment, for now the cost to the current working population is very high.