An international organisation that is campaigning for British pensioners all over the world whose income is frozen by UK policy has won the backing of the current Australian government.
The Australian minister for families and community services, Jenny Macklin, has issued a statement saying that the Australian government ‘considers the indexation policy of the United Kingdom Government unfair and discriminatory’.
The frozen pensions policy currently affects about 555,000 British expats in over 100 countries but more than half of all those are living in Australia. The UK policy means that even although they have paid into the system in good faith during their working lives their British pensions have not been upgraded in line with inflation since they emigrated.
‘All UK pensioners paid into the National Insurance Fund under the same rules, in good faith, and the Australian government believes they should be paid their pensions under the same conditions no matter where they now live,’ said Macklin.
‘I have raised the issue several times with my UK counterparts. I have urged them to discuss options for resolving this long standing issue. I would welcome any moves made that would lead to pension equality for all UK pensioners,’ she added.
The International Consortium of British Pensioners (ICBP) welcomed the statement. It has also called on the UK government to consider abolishing the frozen pensions policy in annual stages starting with expats aged 85 and over.
Currently the UK government says that it cannot afford to do so. It estimates the cost of upgrading all pensions at £665 million but the ICBP argues that it would cost a comparatively modest £100 million to grant immediate parity to those aged 85 and over.
The ICBP also says that unfreezing pensions would encourage even greater numbers to retire overseas potentially saving the taxpayer as much as £7 billion over the next 20 years.
Examples of hardship include Janet Simpson who has a UK pension of £33 a week. She served in the WRAF during the Second World War and moved to South Africa with her husband in 1955. She worked as a teacher and her husband in life assurance but both continued to make contributions in the UK and were entitled to a full pension when they retired. They had no idea that their pensions would be frozen.
Geoff Dancer, 90, who lives in Ottawa in Canada, still receives the same £38.30 a week that he has received since retiring in 1986. His wife Doris has less because she stopped work to bring up their children.
Sam Smith, 73, is planning to move back to the UK from Australia because he can’t afford to live on his UK pension of £72. He moved with his Australian wife but had paid into the UK system for decades.
‘I feel it is a disgraceful betrayal of all the principles of social welfare which the British strove so hard for over so many generations to achieve,’ he said.
Pensions are frozen in countries that don’t have a reciprocal agreement with the UK. Most notably they are not frozen in the European Union, the United States, Turkey and Israel.