Frozen British Pensions

Wednesday 28 March 2018 - James and I go to London

Nigel Nelson is a regular contributor to, 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. In my previous blog, I introduced you to my friend James (real person, name changed). James is an octogenarian who emigrated from the UK many years ago, and retired in Ontario in 1998. He is what is known as a “frozen” pensioner. Now, I know he lives in a cold part of Canada, but that is not why he is “frozen”! No, James is one of 144,000 UK pensioners living in Canada who do not receive an annual increase to their UK state pension — whereas pensioners living in the UK, the European Union, and several disparate countries around the world do receive the annual increase. This is known as the UK “frozen pension” policy. He still cannot understand why, if you live south of the Niagara Falls (in the US) then you get the annual increase, but if you live 500 yards north of the Falls (in Canada) then you don’t. When I showed him a “Pension Erosion” chart that I designed, then he looked up on the chart where I had marked it in blue the year in which he retired, and then realized that he had received £25,000 less than his peers in the UK … even though he has made the same National Insurance Contributions as them, and had earned a “full” UK State Pension. So, James packed his bags, said goodbye to his wife and set off for the UK — and I said goodbye to my wife and went with him. Somebody had to carry his bags! In the space of eight days, we spoke with 24 Parliamentarians (Members of Parliament and Peers), the UK media, and several other pension organisations. We showed everybody the Pension Erosion chart, and there came a new realization of just how badly UK pensioners living abroad in countries like Australia and Canada are being treated by the UK government. For example, for those UK pensioners living in Canada who are 85 or over, the accumulated “Pension Erosion” amounts to £669 million. For those UK pensioners living beneath the poverty line, the Canadian government subsidizes them, which comes out of Canadian taxpayers’ pockets, rather than the UK government’s. How can that be right, or fair? What we learned from our trip to London is that the main issue challenging UK Members of Parliament is Brexit. Nobody knows what is going to happen with respect to the 488,700 UK pensioners living in the European Union (EU). It is not clear whether these pensioners will continue to receive the annual increase to their UK State Pension once the Brexit negotiations have been completed, since the UK government only increases UK State Pensions annually where, “they are legally obliged to", Post-Brexit, If the UK is neither part of the EU or the European Economic Area (EEA), then the UK government is no longer legally obliged to annually increase the UK State Pension for UK pensioners living in the EU. The Telegraph reported in May 2016 that over a 20-year-period, UK pensioners living in the EU would be, “£50,000 poorer.” Many of the UK pensioners living in the EU fear that they will be a “pawn” in the Brexit negotiations, and their annual UK State Pension increases will be a “bargaining chip.” If this is the case — and their UK State Pension is no longer increased each year — then, for many of them, they will have no option but to sell up and return home to the UK. If all UK pensioners living in the EU were to return home to the UK, then the additional cost to the NHS has been estimated to be £2 billion per year. In talking to one MP, we found out that the rural areas may offer the cheapest housing but these houses are in remote locations, far away from medical facilities. NHS hospitals, which are already stretched, will become even more so due to inadequate staffing levels. Every day seems to bring yet another story of how the UK NHS system is one step closer to breaking point. Pensioners tend to be the greatest users of medical resources, so, if they were to return (from the EU) in significant numbers, they would stretch the NHS to beyond breaking point. James and I came back from London with new vigour to try and help the UK pensioners living in the EU, by setting up a new petition. We wanted to let as many people as possible know that the International Consortium of British Pensioners have developed their own petition. This petition is designed mostly for the nearly half a million UK pensioners living in the EU — but also applies to the 144,000 UK pensioners living in Canada who already have their UK state pension “frozen” — who may lose the annual indexation to their UK State Pension as part of the Brexit negotiations. We also ask anyone reading this blog to write to Theresa May, letting her know how you feel about "frozen" pensions, We would also like to encourage readers to join in the battle and become members of the Canadian Alliance of British Pensioners, or, if you live in the antipodes, then join British Pensions in Australia..

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There are 550,000 UK Pensioners living in 120 countries (47 of which are Commonwealth countries) who do not receive the annual increase to their UK State Pension, therefore they have a "frozen" UK State Pension.. There are a number of lobby groups, working together, who are petitioning the UK Government so that all UK Pensioners get the same increase every year regardless of which country they have chosen to live in.


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