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.
I am English born and have resided in England all of my life, I have been in gainful employment since I was 15 years old and paid all my Income Tax and National Insurance, without a gap in my payments, I am now 73 years old. The Westminster government is generally comprised of individuals who have never been in gainful employment, who are career polititions and apparently without any sense of morality or justice. When an MP retires he or she can go and live in ANY AREA of the world and it will not affect any of their pensions from the state, THEY ARE INDEX LINKED FOR LIFE, even in Australia etc. They know how to collect your money and then waste it on pet projects or travel jollies for their own personal benefit. Making money they will leave that to you. I believe that having paid your dues you are entitled to the benefits (index linked), whoever or where ever you are. Irrespective of political persuasion, its a case of “we’re allright Jack”. As you will probably realise I am completely disillusioned and will never vote again for any of them.
We know the state pension issue is wrong, but let’s look at why it is wrong.
Margaret Thatcher cut the State pension link with earnings in 1980, so the state pension has dwindled in value to date, because New Labour have continued her pensions policy.
And what angers and saddens me, is that we British are totally incapable of standing and being counted on this or any other issue in this country that needs protesting about. We simply have not got the guts of the true European’s, particularly the French and the Germans who do not take Government policy they dont like, without stern protest, of course we hardly ever get to hear or see all this on the British media, but then they wouldnt show it, would they.
We are supposed to be in Europe at a cost of £30 + million a day.
Yet when Tony Blair held the Presidency of the EU he secured UK opt outs on what are known as three red lines.
One of these red lines is that UK pensioners would not receive the EU’s much higher state pensions, or the non means tested concessions that are on offer to all European pensioners.
And this is because through Tony Blair’s constitution, the New Labour government now under Gordon Brown, wants the EU to ditch their long held Social model that protected all EU citizens, and adopt our Thatcherite model embraced by New Labour in 1997.
This remains the state of play today.
H and P are two men of nearly the same age, Both retired in 1991 after a lifetime of contributing for their pensions. Both emigrated to Australia for family reasons. Yet H has a basic pension only 3/4 of what P gets. Why?
Note, we are talking about the flat basic pension here, not SERPS. They get different SERPS pensions because they made different contributions. But why are their basic pensions not the same?
Sorry, James, I’m not an expert in these matters. Hopefully someone else more knowledgeable will chip in with a possible explanation.
That’s a very easy question to answer.
You asked – “Should Legality, Equity or Morality Apply?”
All three is the correct answer.
Theft is still theft, no matter how you dress it up.
Those of us wgo have had their pensions frozen have bee robbed by successive UK Governments
It definitely is illegal (robbery), it is definitely not equitable (robbery), and it definitely immoral (robbery).
John Feltham
Townsville
Australia
I’m not quite certain of the facts as I write this, but on a superficial level, it seems apparent that the first two accounts will equal monetary gain, while the third will equal the same plus continued support of their peers, ones who don’t know any better, & various others who’d like to see ethics implemented.
Not new to Governing or even marketing strategies I’m afraid.
Barry Welford suggested that there is a possible explanation for the totally illogical behaviour of British governments going back for decades. All political parties have had the chance to make sure state pensioners are treated with parity, no matter where they live, but have refused to do anything about it. MPs, Ministers and civil servants have given many “explanations” but these have all turned out to be excuses which do not stand up under closer examination. There is NO valid excuse and NO logical explanation!
Although Prime Minister Gordon Brown states that “Fairness is in our DNA” – September 2008, he authorises the Department of Work and Pensions and their legal team to fight frozen British pensioners in the High Court, the Appeal Court, the House of Lords and the European Court of Human Rights.
All the frozen pensioners are asking for is fairness, equity and justice.
Gordon Brown is being two faced in declaring that he is fair publicly but clearly demonstrating that he is unfair in his government’s actions.
Okay, this is how I see it.
My argument is based soley on the UK’s basic State pension that has been paid for through a life time of what were “mandatory” NI contributions when people were working after the second World War building this country up.
These people, today’s pensioners and younger, were promised “cradle to grave care”, and they paid their share of taxes, and NI contributions for it.
Their contributary state pension used to rise in line with earnings prior to 1974, then in 1974 Harold Wilson’s “traditional” Labour Government, with Minister Barbara Castle made sure the basic state pension was linked to earnings or inflation whichever the higher, this move was called the National Insurance Act, and upheld the value of the state pension, and remember this was at a time when British was significantly poorer than today.
However it was in 1980, that the Thatcher Government destroyed all that Labour had set up, she cut the link that kept state pensions increasing with national average wages, and she then linked the state pension to inflation, while bringing in monetarist policies to lower inflation, recalling 3 million unemployed at that time, and New Labour have continued this monetarism 100 per cent.
The national average earnings link should never have been broken, the basic state pension should have been allowed to keep increasing directly with British prosperity, or inflation which ever the higher. And New Labour have not reversed this policy either.
And to make matters worse, it was during Tony Blair’s Presindency of Europe that he secured among other issues, a UK opt out that UK pensioners would not receive Europe’s much higher State/Social pensions.
And so it remains today due to this right wing New Labour Government continuing what Thatcher started, that the state pension is being allowed to dwindle, with excessivelly costly means testing in place.
There are two possible answers to James’ question. One is fairly obvious i. e. one deferred his pension-the other did not,however and more significantly they left the UK a different number of years after retirement.
Note that the pensioner who lived in the UK a longer period after starting the pension continues to get a higher pension for life even if they start with identical contribution records ,work records and date of birth and even if they start their pensions on the same date at the same rate.
Even if you accept the “rationale” for freezing pensions in Australia ,Canada etc what conceivable justification can there be for this result?
Dian Elvin, Please read my posting headed, “Okay this is how I see it”.
Perhaps it should read, “this is how it is”.
The posting explains that “traditional” Labour had a formula, that Thatcher destroyed.
Michael Thompson, thank you for your detailed description of the British State Pension story. Apologies. I probably did not make it clear that I was writing about the 1 million British pensioners living abroad. Half of those receive the same pension they would have received had they stayed in the UK and the basic pension would have grown annually due to indexing. The other 500,000 pensioners, in a different collection of countries abroad, have their pensions frozen from the moment they first retire (if they have emigrated before retiring) or from the moment they arrive, as retirees, from the UK (where their pension was being annually indexed). Tough luck that their families chose to emigrate to a frozen country and not to the USA or Europe. So pensioners who have paid exactly the same NI contributions, throughout their working lives in the UK, receive wildly differing pension amounts – from £5 per week to £95 per week depending upon when they retired. The older they are, the smaller their pension, because it has been frozen for longer. As I know this particular ruling goes back beyond the Thatcher era and none of the political parties have had any intention in the past of introducing pension parity. We are fighting for pension parity in the future.
“”"The other 500,000 pensioners, in a different collection of countries abroad, have their pensions frozen from the moment they first retire (if they have emigrated before retiring) or from the moment they arrive, as retirees, from the UK”".
Answer: This is because the UK state pension is not on-a-par with Europe due to Tony Blair’s opt out on European state pension levels in I believe 2005, and because the UK state pension is linked to the poultry inflation rate in Britain courtesy of the Thatcher government brewaking the link with earnings in 1980, almost 30 years ago.
Because we in the UK are not sharing in Europe’s sociaecomnic conditions, these disparies will continue.
Michael, I really appreciate the points you bring out. In summary it would seem that the general level of UK State Pensions is wholly inadequate and of course the fate of those who have frozen UK pensions (non-indexed with inflation) is then even worse. So much for Gordon Brown who alleges he is the Good Samaritan on matters such as this.
Barry, Gordon Brown, as did Tony Blair, and the previous right wing Tory Government, has betrayed the elderly people of this country wholesale. Their taxes and their contributions mean nothing to today’s Britain.
You see Thatcher vowed to remove the role of the British state because the right hon lady did not believe in the role of the state. And so the link with earnings was cut.
It is not a question of expense that sets the UK state pension so low, it is a question of political dogma.
There can be no doubt that the level of the Basic State pension in this country is woefully inadequate for the elderly generations to live on. Following a 20, 30, or 40 year working life paying into the system both taxes to help build this country up and “mandatory” National Insurance contributions, this should give a decent state pension that should be linked to earnings or inflation, whichever is the higher, so as to protect its value.
But it is not only because Margaret Thatcher broke the State pensions link with earnings in 1980, since New Labour has not reversed this policy.
Because of the inadequate basic state pension, 1 in 5 of the 12 million British pensioners live in poverty, with many pensioners suffering hypothermia related illnesses during the winter months and other cold weather spells because they cannot afford to heat their homes, or to eat properly.
This should shame us all given the ever widening rich and poor divide maintained by the New Labour Government. It embraced Thatcherite policies following their general election victory in 1997. It was Margaret Thatcher who initiated the rich and poor divide, and New Labour has done nothing to fundamentally address this.
Martin Davis has the right answer. H emigrated in early 1991, P emigrated in mid 1997. Each has his basic pension frozen at the date he emigrated. P did not defer his pension; his rate is the 1997 rate.
This result is, of course, discriminatory and illogical. It seems that when freezing was first introduced they did not envisage that indexation would become an annual event. Or perhaps that the freeze would be imposed only for a short time until the economy was strong.
PENSION FACTS
a. The state pension link with average earnings was broken in 1980. Had the link remained, today’s state pension for an individual would now be worth £145.15 a week rather than £90.70.
b. By the time the link is restored by the government in 2012, 3m of
today’s pensioners will have already died.
c. The national insurance fund currently has a surplus balance of £46bn.
d. Around 1.8m pensioners do not claim the means-tested Pension Credit, despite being eligible.
e. 1 in 5 pensioners live below the official poverty line, the vast
majority of them women.
Whilst Michael Thompson’s postings are interesting, I suggest they have little to do with the topic of the original article here which is “frozen pensions” for British pensioners living in some overseas countries.
Perhaps his postings would be better placed under one of the other “pension” articles?
Also, some time ago I received a response under FOI from the UK Government’s Debt Management Office which holds the surplus in the National Insurance Fund in an investment account called “Call Notice Deposits” and the balance was around £50 billion as at 31st March 2008.
Peter, the rules are fairly relaxed here so I’m happy to let the conversation flow where it wants to go.
Thanks for the information on the NI surplus. It really makes the position of the UK Government on this even more untenable.
In fact the original post covered three topics and Michael Thompson’s information is relevant to the third of them. Surprisingly the Archbishop of Canterbury came out mainly on governments bailing out companies but Gordon Brown widened the discussion to cover all those who might be in need and suggested he would be the Good Samaritan. I’m sure UK pensioners wherever they may be are in need of Gordon Brown’s intervention. Perhaps the only ones not covered may be those mentioned in the second topic who are getting their fuel rebate while living on the Costa del Sol or the Phillipines.
Martin Davis wrote. “Even if you accept the “rationale” for freezing pensions in Australia ,Canada etc ”
I can see no rationale whatsoever.
I paid compulsory amounts into the NIF with the belief that I was going to get my pension when I retired.
Nobody told me that if I left the country that I would get my pension frozen – sorry stolen.
“”"I paid compulsory amounts into the NIF with the belief that I was going to get my pension when I retired”"”"
Is John Feltham refering to “State” pension contributions in his posting that were “mandatory” paid by all people working after the second World War in Britain ?
Peter Morris, as a person of “non” pensionable age myself, but campaigning on behalf of British Seniors in receipt of a diminished state pension in the UK, I welcome Barry Welford’s Blog.
Because the issue that I, and other people, including pensioners in the UK are campaigning about is being swepped under the carpet
by the British media, the two mainstream political parties, and is being ignored by the vast amount of British people.
Yet dimished state pensions since the 80′s has created to date 1 in 5 pensioners from a 12 million generation living in poverty in Britain who have no chance to move anywere in the world, let alone to escape abroad, plus millions of UK pensioners are having to choose between heating their homes and eating because of the reason stated, and they too will never be able to escape their miserable existance and escape anywhere else, and there are also thousands maybe millions of UK pensioners suffering hypothermia related illnesses resulting in many untimely deaths among UK pensioners, and all this our Government continue to ignore by serving up nothing but miserly state handouts, means tested and otherwise, to call this a disgrace, is an understatement.
It is an insult to all British pensioners everywhere in the UK who have worked hard and paid their taxes and their National Insurance contrbutions all their working lives.
So I for one believe that Barry Welford’s Blog is most welcome
Michael Thompson asks….
“””I paid compulsory amounts into the NIF with the belief that I was going to get my pension when I retired””””
Is John Feltham refering to “State” pension contributions in his posting that were “mandatory” paid by all people working after the second World War in Britain ?
The answer is, yes.
UK state pensions are linked to the UK inflation rate, a miserly and miniscule amount.
So if ive got this right, can somebody tell me what all the fuss is about that UK pensioners living abroad are moaning because they dont receive these increases, when there are literally millions of pensioners residing here in the UK starving and freezing to death because of the low state pension, but these pensioners cannot afford to move.
Where is the justice ( for want of a better word )
in these complaints ?
Michael Thompson – firstly, I believe this website is based in Canada where all British pensioners receive frozen pensions, so it is quite apt that the issue of frozen pensioners is discussed here. Not “moaning” as you uncharitably suggest.
Secondly, I did not state or imply that Mr Welford’s blog was not welcome. I merely suggested that some of your comments would be better posted elsewhere on Mr Welford’s blog, perhaps under orginal articles that were more relevant.
Thirdly, I too, like yourself, am not yet a pensioner. My parents lived for many years in South Australia, on part British pensions that were frozen at the rate when they retired in the 1980′s. When I found out that half the pensioners living overseas had their pensions uprated each year, whilst those living in Australia, Canada, new Zealand, South Africa, and many other countries were frozen, I could see the unfairness of that policy. Especially when one realises the fact that they all paid the same in National Insurance Contributions as those 11 million pensioners still living in the UK.
Fourthly, the effect of even relatively minor annual increases in state pensions can certainly add up over time. There have been British pensioners living in Australia on full pensions frozen at rates of less than £10 per week. This is obviously unfair when one sees his brother, who retired in the USA, was receiving a pension of £90 per week, both having paid the same in NI contributions.
Peter Morris, I do not think that I am being uncharitable in what im saying, wherever this Blog is posted.
Because it is about the UK’s basic State pension which was linked to inflation under the British right wing Tory Administration from 1980, a policy our New Labour Government from 1997 have not reversed back to linking the state pension to earnings or inflation as per under the Labour Government in 1974.
Over a year miniscule increases in the UK inflation rate amount to peanuts, hence continued poverty in the UK for those pensioners who have to rely on the state pension, and who cannot afford to move, and who have no representation in Britain because pensioners are devided for all manner of reasons, apathy being one.
I would have also thought that UK pensioners who have been well off enough to have ditched Britain, would have stayed and joined what is a fight to get justice for all pensioners in the UK.
Also I did not say that you thought/implied that Mr Welford’s Blog was unwelcome. What I said was that I welcomed it.
Michael, I think we all need to be fighting the same fight rather than arguing among ourselves. Your efforts are laudable and will benefit all if successful. However those who have emigrated have not ‘ditched’ Britain. So often these arguments seem to get into black and white discussions. A goodly proportion of UK pensioners who are emigrating are going to live in the same country as their children or grandchildren. By doing so, they no longer call on other services that are funded by the UK Government such as the National Health Service. Some of them end up in poverty greater than they would have suffered if they had stayed in the UK. Some are forced to return because they cannot live on the frozen amounts they receive. When they get back, they immediately receive the inflation-protected pensions they should have been receiving. They also become a charge on the UK government for all those other services.
This is illogical behaviour on the part of the UK Government as well as being inequitable and immoral.
Hi Barry, Yes you are right, I apologise for making that comment.
But I know that my efforts, plus other people’s on behalf of UK pensioners will never be bettered until we British stick together as a nation.
Our UK politicians now refere to “a broken Britain”.
Ide add to that “an apathetic Britain” as well.
William Allan Waterman, Like you I left school in the early to mid 60′s aged 15, and ive always worked all my life, including 13 years on the British post office, and now im self employed age 60 of April 2008.
What saddens me in my 20 years experience campaigning on behalf of the elderly generations here in the UK is how many people in general of pensionable, and none pensionable age, have no idea of the politics behind pensions, or any other issue in the UK today.
On state pensions. In 1974 under Harold Wilson’s Labour Government, both himself and Minister Barbara Castle, both now deceased sadly, brought in what was called “The National Insurance Act” which fundamentally linked state pension increases to inflation, or earnings, whichever the higher, to protect the state pensions value.
The real problem is that in 1979 everything changed when Margaret Thatcher’s Premiership and leadership of this country decided to destroy the National Insurance Act, in favour of linking the state pension to inflation and removing the earnings link, and introducing wide spread means testing of pensioners.
And believe it or not, the amount of British people ive talked to this past 20 years who never knew this one fact, never ceases to amaze me.
Michael Thompson seems to have turned this blog site into his private soap box.
Of course it is true that many pensioners in Britain are poor, and we can blame this or that government. But that is no reason for perpetuating other forms of pension injustice.
The fact is that non-resident pensioners are divided into two classes – those that get indexation and those that do not. Jeff Rooker, when he was the minister, admitted that there was no logic in this. He did not go so far as to admit that it was not only illogical but also unfair.
Two wrongs do not make a right. The government can do something about frozen pensioners at the stroke of a pen and at little cost. It would cost a lot more effort and money to fix the other problems of the pension system.
Here is an old story with a new twist;
An old lady had been living for a number of years in a little old farm cottage just north of the USA/Canada border.
With the advent of modern surveying equipment such as the GPS, it was decided that the house was located at 48° 59′ 59″ North, and was therefore in the USA.
When the old lady was informed, she was overjoyed. “Whoopee”, she said, and “goody goody gumdrops”.
The border official, thinking her reaction was a bit strong, asked her why.
Now the old ending to this story has her replying: “I couldn’t stand another one of those Canadian winters”.
But in the new ending she says: “At last my British pension will be uprated”.
Which ending is the more absurd?
That is an excellent story, James, to illustrate the absurdities. … and indeed you are right, the serious problems with the UK state pension system will need major investment although the surplus in the National Insurance fund which resulted from pensioners’ contributions should really be applied to that.
In the case of the frozen pension issue, I believe a full evaluation of the accounting would show a net benefit to the UK Treasury given that there would no longer be an economic barrier to pensioners emigrating elsewhere. Pensioners who emigrate are helping to lighten the financial load of the UK Government and therefore that should help those pensioners who stay.
James Nelson, private soap box be damned, I’m just stating facts on this issue.
Jeff Rooker was I believe the first pensions minister in the New Labour Government who upheld the inflation linked state pension, and the wide spread application of means testing for pensioners.
Means testing, I might add, is costing 10 times more of tax payers money than it would cost to restore the State pension and earnings link
While the subject matter on this forum is “non-indexed pensions,” I resent being told by Michael Thompson that those who emigrated had “ditched” the UK.
If I remember correctly, it was the British Gov’t itself that urged so many to emigrate right after WWII because of the tight unemployment situation in the UK resulting from the demob of so many military personnel. Their jobs, taken over by women (bless them!), were no longer available as women exerted their right to contin ue to work if they wanted to.
Such emigration was further urged by the British Gov’t in the form of subsidized tickets to Australia and Canada, costing such emigres just 10 pounds each.
What I also resent is that some of our NI funds are not being used for their intended purpose, that is, to pay decent, indexed pensions to all who paid into the scheme.
Pensioners in the UK are being short-changed!
But some of those living abroad, at the suggestion of the UK Gov’t, are in dire straits.
Prewar, I remember the days when England was looked upon across the world as the standard bearer of fair play.
Postwar, successive British Gov’ts have shown the world how parsimonious they can be towards their own people!
I find it repulsive to have to write comments like this, but the only thing that comes to mind is — Shame on Great Britain!
You missed my point jolly jack.
My point was that those thousands who have left Britain to move abroad might indeed be finding life difficult in some aspects, they are in another country after all with different rules and regulations, we do not rule the waves now, mind you in my view we never did, yet we still remain with a huge superiority complex to each other and the rest of the world.
My point is that those who have already left, have helped turn Britain into the hell hole it is, in short these people are leaving a country they had a help in making an awful place to live in.
Does Michael Thompson think that all expatriates should be treated alike? Or is it only those who have emigrated to old commonwealth countries, such as Australia and Canada, that should have their pensions frozen? Is pension freezing an appropriate punishment for “ditching” the old country? Should pensioners who now live in the USA have their pensions indexed or frozen?