Tangram

I agree there should be a level playing field. All foreign received pensions should NOT be index linked.

el_richo

Disparity is a part of life. People should know the pension situation before moving so should factor it into their decisions.

I don't know the answer but would be interested to find out; what would the financial impact be to the UK if they caved in and indexed pensions to all instead of the current selection?

Editha

el_richo said
It would be a complicated calculation. Elderly people tend to cost the state in health care and community care, and many need their pensions topped up with means tested benefits.

The current arrangement is a disincentive to British pensioners to retire to live near children in former commonwealth countries. So, you'd have to take into account the saving from having more pensioners opting to live abroad, and set that off against the cost of index linking pensions.

Certainly, in my own case, it is a factor in our decision to return home. Both my husband and I are entitled to full British old age pensions, and it will be an important part of our retirement income. It is only one factor in many, but we could not afford to stay in Canada, even if we wanted to.

Novocastrian

I would suggest a compromise arrangement (which of course will never come about). If someone reaches pensionable age in the UK, and then moves abroad, the pension should be indexed to the CPI in their country of residence or that in the UK, whichever is lower.

If they left the UK before receiving a pension: no indexing. They should have done their research.

Editha

The idea seems to have crept into this thread that state pensions in the UK are and always have been index linked. In fact there has been no such rule for most of the last 30 years, and strictly speaking it isn't true now.

The state pension was linked to average wages for six years from 1974. That was scrapped by Maggie. Since 2011 the rule is they rise by 2.5%, average earnings, or prices, whichever is greater. In current circumstances that will be prices. In all other years, it has been up to government to put the pension up, and although the rates did rise year by year, until a couple of years ago pensions had slipped behind CPI.

It is not obvious to me why a British pensioner living abroad should not receive their pension on exactly the same basis as one resident in Britain, and I wish Novocastrian and the other hostile contributors to this thread would explain their reasoning.

Novocastrian

I, for one, am not a hostile. I'm quite sure that there must be some individuals in Canada and elsewhere who are affected by this anomaly and for whom it is important, but they are surely few and far between.

For the rest, they should have known the rules before deciding to relocate or (more likely) it makes absolutely no practical difference to them.

It's not my reasoning or anyone else's on this thread, but it is reality and it ain't gonna change simply because pensioners in Canada (although many still have the right to vote in the UK) are trivial in number and will never wield political influence in the UK.

As dbd33 said. Dead. Horse. Flogging.

Editha

I don't think it is flogging a dead horse, for the reason that the British government is going to have to reconsider the pension rights of British residents abroad in the near future.

The Coalition government is proposing to introduce a flat rate pension, irrespective of contributions, of £140 p.w. There was a consultation on it earlier this year. The only qualification would be 7 years contribution to national insurance.

There was nothing in the discussion document to indicate how British people residing abroad will be treated, but clearly this will have to be considered at some point.

To me, it seems an ideal opportunity for some lobbying on behalf of ex-pat pensioners, and the petition is very timely.

Editha

Novocastrian said the people affected by this must be far and few between. I believe the estimate is just under half a million people.

My understanding is that the number is the reason the UK government has always refused to change the rules. If there were fewer, they would have been happy to do so.

Novocastrian

Well best of luck. However the coalition (also a dead horse) may find it has other priorities or may just throw in a British Resident phrase here and there (they do have legal people in the Civil Service you know). You can lobby al you like, but you are never going to attract the attention of yer average British voter, who couldn't give a shit about those rats who deserted a sinking ship.

Novocastrian

No, you misunderstand my remark. The half million affected hide a tiny number who actually give a damn. I will soon be one of the half million+1, but it really makes absolutely no difference to me whatsoever.

What fraction of that half million depend on their non-index linked UK government pension as representing a significant part of their total retirement income?

Editha

I don't know, but presumably quite a large number, or they would never have found the money to take a case through the British courts and to the European Court of Human Rights.

Alan2005

Well, at least the e-petition is cheap so when it fails nobody will have wasted their money.

BristolUK

A couple of points from the Australia forum

So a loss of over $200 a month in only 7 years.

Alan2005

When you steal $200 less from british tax payers it's not a loss.

Editha

Alan, please explain why you think that claiming the UK state pension is theft. Do you think the same argument applies to the CPP?

Canadians who live abroad can claim the CPP and do get the annual index linked increases.