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'Cheaper' to uprate frozen pensions
A new report commissioned by campaign group the International Consortium of British Pensioners (ICBP) suggests that the Government would save money by uprating the frozen pensions of British retirees overseas.
By Leah Hyslop
Published: 11:06AM BST 30 Sep 2010
9 Comments
A life in the sun: some pensioners living abroad have a pension as low as £6 per week.Photo: Flo Smith / Alamy
There are approximately 543,000 British pensioners living overseas who do not receive index-linked pensions.
Whereas some Britons receive annual increases in line with the cost of living, those who emigrated to countries which do not have reciprocal arrangements with the UK had their pensions frozen when they first settled in their new country.
For the oldest overseas pensioners, this can mean that their pension is as low as £6 per week.
The new report, entitled Pension parity: can the UK Goverment afford it? surveyed a representative sample of British pensioners, and showed that nearly half (46 per cent) would like to retire abroad.
Out of these, one in three (34 per cent) want to retire to countries affected by the pension freeze.
Because of the freeze, however, two fifths of these pensioners (39 per cent) are deterred from moving.
The report concluded that although uprating all British pensions would cost the government around £478 million per year, it would also encourage more people to retire overseas - in the long-term saving money in unused health and social benefits.
John Markham, director of UK Parliamentary affairs for the ICBP, said: “The Government has said that it cannot afford to uprate all pensions, but our report shows that by doing so it would still pocket a massive saving.
"Every person who retires abroad saves the Government around £4,000 per year, and we estimate that around 7,000 people retire to countries where pensions are frozen every year. This number would clearly increase if the freeze was lifted. The report suggests that if all pensions were uprated, the Government could save £31 billion over the next 15 years, compared with only £33 billion if they weren't uprated.
“Essentially, these are vast numbers, which I don’t think the Government understands or recognises. It’s not simply the case that these people, many of whom made national insurance contributions their whole working life, deserve to have their pensions unfrozen: it makes economic sense too.”
In March, the European Court of Human Rights dealt a huge blow to expatriate pensioners by ruling that denying them index-linked pension rises did not breach their human rights. The ICBP has responded by beginning what they call a "real hearts and minds campaign". They are presenting petitions to leaders at each party conference, and have not ruled out the possibility of taking legal action again.
“We are hopeful that the Coalition will listen to our demands,” said Mr Markham.
Pension parity: can the UK Government afford It? was commissioned from Matrix Evidence by the ICBP.
For more information visit the ICPB’s website here.
A new report commissioned by campaign group the International Consortium of British Pensioners (ICBP) suggests that the Government would save money by uprating the frozen pensions of British retirees overseas.
By Leah Hyslop
Published: 11:06AM BST 30 Sep 2010
9 Comments
There are approximately 543,000 British pensioners living overseas who do not receive index-linked pensions.
Whereas some Britons receive annual increases in line with the cost of living, those who emigrated to countries which do not have reciprocal arrangements with the UK had their pensions frozen when they first settled in their new country.
For the oldest overseas pensioners, this can mean that their pension is as low as £6 per week.
The new report, entitled Pension parity: can the UK Goverment afford it? surveyed a representative sample of British pensioners, and showed that nearly half (46 per cent) would like to retire abroad.
Out of these, one in three (34 per cent) want to retire to countries affected by the pension freeze.
Because of the freeze, however, two fifths of these pensioners (39 per cent) are deterred from moving.
The report concluded that although uprating all British pensions would cost the government around £478 million per year, it would also encourage more people to retire overseas - in the long-term saving money in unused health and social benefits.
John Markham, director of UK Parliamentary affairs for the ICBP, said: “The Government has said that it cannot afford to uprate all pensions, but our report shows that by doing so it would still pocket a massive saving.
"Every person who retires abroad saves the Government around £4,000 per year, and we estimate that around 7,000 people retire to countries where pensions are frozen every year. This number would clearly increase if the freeze was lifted. The report suggests that if all pensions were uprated, the Government could save £31 billion over the next 15 years, compared with only £33 billion if they weren't uprated.
“Essentially, these are vast numbers, which I don’t think the Government understands or recognises. It’s not simply the case that these people, many of whom made national insurance contributions their whole working life, deserve to have their pensions unfrozen: it makes economic sense too.”
In March, the European Court of Human Rights dealt a huge blow to expatriate pensioners by ruling that denying them index-linked pension rises did not breach their human rights. The ICBP has responded by beginning what they call a "real hearts and minds campaign". They are presenting petitions to leaders at each party conference, and have not ruled out the possibility of taking legal action again.
“We are hopeful that the Coalition will listen to our demands,” said Mr Markham.
Pension parity: can the UK Government afford It? was commissioned from Matrix Evidence by the ICBP.
For more information visit the ICPB’s website here.