There are about 235,000 retirees in Australia who’re in receipt of a UK state pension or part thereof – most of them are British expats, like me.
But unlike the Britons who’ve retired in the US, Israel, the European Economic Area, Turkey, Jamaica and numerous other countries, we Brits in Australia and most Commonwealth countries don’t get our UK state pension annually uprated in line with inflation.
This means we receive the same amount of pension in pounds sterling as was first paid to us. My own part-pension started in June 2003 at £45 a week (approximately $125 – the exchange rate at the time was about $2.78 to £1) and 17 years later, is still £45 a week (approximately $87 at the current exchange rate of about $1.93). That is, except when I take a vacation in the UK or Europe and advise the UK’s Department of Work and Pensions accordingly!
The UK is the only OECD country that practices a selective pension policy of freezing its state pension in some countries but not others – an immoral system that it has kept in place for almost 70 years.
In 1997, a UK House of Commons committee investigated the issue and found that a simple change to the law could ensure all British retirees around the world were treated fairly “provided the political will was there to do so”. Unfortunately, no such political will eventuated in 1997 or in subsequent years.
Annette Carson, a British woman who retired in South Africa, challenged the UK government in a legal action in London’s High Court in 2002, then the Court of Appeal in 2003 and the House of Lords in 2005. But although Lord Carswell told the hearing that there appeared to be “no justification” for paying some British pensioners less than others, Annette Carson lost her case on a legal technicality when it progressed to the European Court of Human Rights.
At the time, Dame Joan Bakewell, the government’s own champion for older people, commented that, whatever the niceties of the law, changing the status quo was a matter of social justice.
There are currently thousands of British expats in Australia approaching the UK’s pension age of 66, who may be unaware they’re entitled to a part-UK pension, or that the pension they will receive won’t be as generous as that paid to expats in other countries. That’s why I’m the vice chairman of British Pensions in Australia (BPiA), a not-for-profit association that, in return for a small annual subscription, offers to help all UK expats discover their UK pension entitlements and learn how to improve them.
BPiA uses the funds raised via subscriptions to finance an International political and media campaign in the UK aimed at forcing the UK Government to overturn its unjust position of freezing the pensions of 4 per cent of all UK pensioners – those that retired to countries where pensions aren’t uprated. There are similar groups in other countries who’re also funding the campaign, including a large group in Canada, where British pensioners are in the same situation as those in Australia, and we all collaborate as part of the International Consortium of British Pensioners.
This discrimination against 520,000 British pensioners retired overseas continues even though the UK government itself is signatory to the Commonwealth Charter that states “we are implacably opposed to all forms of discrimination”. The UK government justifies its actions simply by ridiculously claiming it can’t afford the $600 million cost of treating all British pensioners equally.
We believe the UK’s immoral regulation could be legally challenged again, but to do so would possibly cost thousands of dollars so, unless the Australian government and possibly Canada’s, is prepared to invest in funding another legal case against the UK, this is currently out of the reach of British overseas pensions organisations.
There’s a good reason the Australian government may be interested in funding such a case to overturn the current UK system, though; BPiA calculates that changing the system could save Australia an estimated $1 billion every four years because of a reduction in the means-tested Age Pension it currently pays to British retirees in Australia. In short, a higher UK pension payment means more UK income, which results in a lower Aussie pension but no more than 50 per cent of this additional UK income!
I appeal to all British expats in Australia, as well as Australians who have worked in the UK and may have acquired rights to a UK state pension, to learn more about this appalling and highly discriminatory British government practice. I’d also encourage British expats to contact BPiA to ask for our assistance in applying for and maximising their UK pension.
The annual subscription this service costs is used to help finance our ongoing fight to uprate our UK pensions and provide fairness, equality and dignity in retirement. Freezing the pensions of British expats is so blatantly miserly that it surely doesn’t become a nation that promotes itself as being fair-minded and ethical.
Our eventual success will result in a win-win for us all as well as $500 million per annum for the Australian economy.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
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