Frozen UK Pensions – Should Legality, Equity or Morality Apply?

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Three issues that affect seniors by causing extreme financial distress were handled according to different principles by the UK government during the past month.

In the first case it was legality that rules.  Expats Pension: Appeal against frozen pensions ruling

The International Consortium of British Pensioners will appeal against the European Court of Human Rights’ rejection of its claim that Britain’s frozen pensions policy is discriminating and in breach of the Human Rights Act.  The judgment adversely affects more than half-a-million expat retirees and some of the most vulnerable people in society. It will also deter thousands of Britons still resident in the UK from joining family overseas – surely a right that none expected to have taken away after paying pension dues throughout their working lives.

In the second case, apparently forgetting the principle of legality, the UK government seemed to be looking at equity in this case.  Brit pensioners abroad face fuel pay cuts

A Parliamentary investigation into fuel poverty is to investigate £12 million a year of winter fuel payments made to British pensioners living abroad. Under official rules the £200 winter fuel allowance is paid to anyone living in Britain on their 60th birthday on a state pension, even if that person intends to retire or spend winter months in warmer countries. The payments rise to more than £300 for the over-80s. There is not even a requirement for the money to be used for heating bills.

The payment is only made if British citizens move to one of the 29 countries in the European Economic Area. It is part of the European Union portable allowances scheme and cash is paid into overseas bank accounts.  It does not apply to anyone moving to Commonwealth countries such as Australia, New Zealand or Canada, who have their pension and fuel payments frozen once they leave Britain.

The third case illustrated that the UK government was now moving to the higher plain of morality.  Gordon Brown and Archbishop of Canterbury in moral clash

Mr. Brown said that as the son of a church minister he always listened to senior church figures.  Drawing on the parable of the good Samaritan, he said: “Every time someone becomes unemployed or loses their home or a small business fails it is our duty to act and we should not walk by on the other side when people are facing problems.  That’s the reason why our fiscal policy is designed to give real help to families and businesses and to give them that help now.

Picking and choosing among these different principles is hardly moral.  At the least going forward one might hope that all three cases would be handled with a certain consistency.

PS. If you’re looking for a way of keeping up-to-date on the first topic, the Pension Parity UK website is a complete information source with all the latest news.

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