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UK Expat Frozen Pensions to ‘Thaw’?

UK Expat Pensioners may Receive Redress over Frozen Pension Issues

Just over half a million UK expat pensioners may receive some form of payment in respect of frozen pensions. Momentum seems to be shifting in favour of the pensioners following a meeting between Oliver Letwin, Cabinet mister for government policy, and the International Consortium of British Pensioners (ICBP). The latter have been fighting the pensioner’s corner for some time.

The expat pensioners have another ally in the form of the All Party Parliamentary Group on Frozen British Pensioners (APPPGFBP) who has been pushing the issue from inside Westminster. The push for the frozen pensions to be released has also taken another boost with the announcement that the Department of Work and Pensions (DWP) has commissioned a review to determine the true cost saving from UK Pensioners living abroad.

These developments have been described by Sheila Telford the director of the ICBP in Canada as a breakthrough, although she advised caution as only an up-rating and not full redress is on the table from the UK Government at the moment.

She said: “[The up-rating solution] is not the basis of the ICBP’s campaign, as it would not really help the oldest and most vulnerable pensioners – who would receive a percentage increase [on their current frozen pension payments] on a very small base – we would welcome it as a step forward.”

 

Frozen Pensions – What is the Issue?

UK expat pensioners who live in certain countries do not receive the index linked pension increases that pensioners living in the UK, or certain other countries where a reciprocal agreement exists. This is despite paying national insurance contributions while living and working in the UK.

According to the ICBP, this is a battle which has been fought for seventy years. In 1946, UK expat pensioners first saw their pensions ‘frozen’, when UK pensioners saw their pension payments rise to £1.30, while the expat’s pension payments remained at £0.50.

UK Government estimates believe the cost to the economy would rise to £157.7m in four years should full redress come to fruition.

The UK has reciprocal agreements with EU countries and the USA, but other popular destinations for UK expats including Canada, Australia, and New Zealand, it does not.

 

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Source: International Investment

 

For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at


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