More than 500,000 British expats with frozen state pension payments hope anew campaign will break their deadlock with the government.
A seminar staged by the International Consortium of British Pensioners (ICBP) will look at ways forward to unfreeze state pensions with contributions from policymakers and the financial services industry.
The problem is retirees who have emigrated to places like Canada, Australia and South Africa do not get the UK state pension increased by the rate of inflation – instead their payment is pegged at the amount they first received.
The reality is that their pension is decreasing in real terms because of inflation, and when Prime Minister David Cameron announced that the UK was moving to a single state pension, the ICBP urged him to reconsider the government’s position.
Previous legal challenges against the policy found it was not contravening the European Convention on Human Rights.
Figures are wrong
Pensions Minister Steve Webb said that the court’s judgment confirmed his belief that there was no legal requirement for the government to increase state pensions for expat pensioners.
John Markham, of ICBP, said: “The seminar will show how affordable the indexing of pensions is because the government says it can’t afford to uprate pensions.
“However, the government doesn’t want to discuss one of our main points which is that when someone leaves the country, they save the government money in benefits, social and NHS costs.”
Figures put together by ICBP help to underline their argument.
The consortium says the government has put forward a figure of £655 million for uprating pensions but, they say, everyone who leaves the country saves the UK taxpayer around £3,500 each per year.
Support from MPs
With 565,000 retired expats dotted around the globe, that equates to nearly £2 billion a year – a figure backed up by research from Oxford Economics.
Their figures put the saving at £2.3 billion and, they point out, the number could rocket to £7.2 billion every year because if pension parity was introduced then more people would emigrate in retirement.
The ICBP also says that many of the affected pensioners have lived and worked in Britain at some stage in their working lives and now the group wants ‘parity’ for all UK pensioners.
The seminar is due before the Single Tiered State Pension Bill is introduced to Parliament and the campaign wants Clause 20 removed which ensures that frozen pensions will remain in place.
The clause, entitled Prisoners and Overseas Pensions, was introduced by the DWP Select Committee and the ICBP says their campaign will not end and they have the support of several MPs who will fight their corner in any coming debate.