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Breakthrough for 'frozen' pensioners living abroad

The Cabinet Office has agreed to look at a plan to unfreeze the pension income of retirees living abroad.

 

by Michelle McGagh on Feb 04, 2016 at 10:41

Breakthrough for 'frozen' pensioners living abroad

Expats who have had their state pension payments 'frozen' are a step closer to justice after the Cabinet Office agreed to consider a plan to partially uprate the income they receive.

Around 1.2 million pensioners live abroad but depending on where they live, the state pension they receive is very different. Around half, 550,000, of those pensioners have had their pensions frozen as they are not entitled to annual increases in the state pension – known as uprating.

This means they are only entitled to the sum they received when they first started drawing their pensions, with some living on as little as £6 per week.

Sheila Telford, director of the International Consortium of British Pensioners (ICBP) said there was ‘no rhyme or reason why the pension is uprated if you live in Turkey but not if you live in India’.

‘It is illogical…it is wrong and it should be stopped,’ she said.

Ongoing campaign

The campaign to unfreeze pensions has been running for a number of years but Telford said it had made its most significant breakthrough following a discussion with Conservative MP and minister for government policy in the Cabinet Office Oliver Letwin.

Letwin has agreed the Cabinet Office will crunch the numbers for a partial uprating that have been provided by the All Party Parliamentary Group on Frozen British Pensions, which ICBP works closely with.

The partial uprating was described as ‘an affordable policy alternative and a major step towards ending a great policy injustice’.

Under the plan frozen pensions would be increased 2.5% a year from their current figures (which is different for each individual depending on when they retired and what their state pension is), rather than bringing frozen pensions in line with unfrozen ones and then rerating from there.

In the first year, the cost would be £30 million, in the second £60.8 million, then £92.3 million in the third year, £124.6 million in the fourth and in the fifth year it reaches £157.7 million.

Although the figures look large, the ICBP argued that in the first year the cost is equivalent to 0.03% of total pension spending and even after a decade it is 0.31%.

Costs could be offset

However, the uprating could be cost neutral, said Conservative MP Roger Gale, who is backing the frozen pension campaign.

This is because of the ‘unquantifiable’ savings that could be made by increasing pensions, which in turn allows pensioners to move abroad to be with their family or to return to their country of origin.

‘The second half [of the calculation] is difficult to quantify because we do not know two significant factors: we do not know how many [pensioners] will come back [to Britain] because they cannot afford to stay overseas [receiving reduced pension] and they will become a charge on health services…and social services,’ he said.

‘The other side that is difficult to quantify is we don’t know how many people drawing a pension in the UK and using the health and social system would return to their country of origin and would cease to be a charge [on these service].’

Figures calculated by the ICBP said there is an average £4,300 net saving for each pensioner that moves overseas and if 6,977 pensioners were encouraged to move because they would receive uprated pensions, the cost of the partial uprating would be covered.

Cabinet scrutiny

Gale said Letwin was 'sympathetic’ to the cause of frozen pensions and the numbers produced by the ICBP were currently being ‘crunched by the Cabinet Office’.

‘The Cabinet Office is going through the numbers to see if they stack up,’ said Gale.

‘We want them to recognise that this makes sense financially, and then we have a case to take to the Treasury.’

Gale added that he had spoken to pensions minister Ros Altmann ‘who is supportive of the cause’ but said the Department for Work and Pensions (DWP) did not have the money to agree an uprating.  

‘Ros Altmann said this is not something the DWP can deal with... the DWP has not got the money,’ he said. ‘If we want new money [to pay for it], that money will have to come from the Treasury. It may be possible to persuade the Cabinet Office and they may in turn be able to persuade the Treasury.’

The ICBP had campaigned for a full uprating of the frozen pensions but government concerns that it would lead to a legal battle for retrospective uprating has meant it has had to settle for fighting for a partial uprating.

Gale said it was a ‘compromise’ as the ‘government is afraid of a retrospective challenge’.

‘If they [fully] uprate tomorrow then someone somewhere in the world will say they want the last 30 years [of uprating they missed out on] back and that ends up with an astronomical figure [to pay out], so rather than do something the obvious choice [for the government] is to do nothing,’ said Gale.

He added that a partial uprating ‘would not be liable to any legal challenge’.

Telford said she has ‘a great hope that someone is looking at the financial aspect let alone the moral aspect’ of frozen pensions.

‘It is wrong for people to be denied pensions they paid for,’ she said.

The cause is also being supported by shadow pensions minister Angela Rayner who described frozen pensions as ‘unfair and illogical’.

‘Over 550,000 people are losing over half their money they worked hard for. The fought for their country, they worked hard, paid national insurance and paid tax, it is unjust and something has to be done,’ she said.

‘It comes down to decency…it is disrespectful not to [uprate pensions].’

46 comments so far. Why not have your say?

Mike R

Feb 04, 2016 at 13:35

"It is wrong for people to be denied pensions they paid for,’ she said."

'

The symptom of todays Conservative Government as it pours out of its Coffers in Foreign aid and Welfare benefits to non UK citizens and their EU based families who have made NO contribution in to the UK .Recently UK ex pats living in some EU countries were without Notice stripped of Winter Fuel Allowances. This is not about the amount but about the principle of its taking . Without notice and becausein one case France is aligned with its overseas territory Reunion . Only the DWP could dream that one up to save a Half penny. Ex pats in Italy did not suffer the same WFA withdrawl.

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PaulSh

Feb 04, 2016 at 14:21

"It is wrong for people to be denied pensions they paid for,’ she said."

But that's not how the State Pension works. It's not a money purchase scheme where you save when you work and then draw the money out when you've retired, it's today's workers who pay today's pensions. If anyone else apart from a government was organising something like that, it would be called a Ponzi scheme and they would be jailed for it.

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Mike R

Feb 04, 2016 at 14:27

Ok so you pay some and not others and spend on Welfare benefits for families in Europe. Because that is what is Happening . Selection by Government decree.

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George Morley

Feb 04, 2016 at 16:14

There is no justification in denying a pensioner who has paid the mandatory, repeat Mandatory contributions to the National Insurance Fund to be denied the annual pension uprating !

This is currently done by virtue of location of the pensioner which has nothing to do with the pension or the government department who administer it.

To grant the indexation by postcode ;lottery is plain stupid and no pension provider would be allowed to get away with such a scheme to save money but the government by implementing a law however crude and discriminative .

The UK is the only country as a member if the OECD to do this and all agreements against discrimination are ignored.

With the UK being head of the Commonwealth one would naturally think that anyone retiring there would be OK but the opposite is the case as the majority of Commonwealth countries are where the freezing appears to be aimed.

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Jane Davies

Feb 04, 2016 at 16:26

A breakthrough? How can this be fair when those who have been frozen the longest get the least? This is still discrimination ALL have paid into the NI scheme, in many cases for 44 years ALL are entitled to be treated the same. This injustice should never have been allowed to go on for decades and for Ros Altmann to say "this is not something the DWP can deal with... the DWP has not got the money,’ he said. ‘If we want new money [to pay for it], that money will have to come from the Treasury. It may be possible to persuade the Cabinet Office and they may in turn be able to persuade the Treasury." is just a slap in the face for those who have paid for the same pension as those in other countries who do not have their pensions frozen. Money is available to all and sundry who have not paid a penny in taxes so just get on and do the right thing, no more lame excuses just get it done.

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Mike R

Feb 04, 2016 at 16:36

GM & JD very well and in my view correctly put.

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Jeremy Stanford

Feb 04, 2016 at 19:03

And what of the implications of a Brexit? I've always thought of the division between uprated and non-uprated overseas pensions as mainly equating to EU and non-EU retirement destinations (though I believe there are other uprated destinations such as the US). If the UK left the EU, what would be future pensions policy for British pensioners in EU countries?

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George Morley

Feb 04, 2016 at 21:49

Thankyou Mike R.

And to Jeremy S : I would say that the government would have one hell of a

problem because should that happen and the pensions in the EU be frozen then multitudes of pensioners would be moving back to the UK believe me.

Last year 2,500 frozen ex-pats returned to get their uprated pension and those in Europe could just drive back.

Considering the overall saving that a pensioner abroad makes to the UK it would be madness especially as a couple of years on there is reckoned to be a gain for the government in the NI Fund.

Ah, but we are dealing with politicians where commonsense is rather thin on the ground.

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Victor Lanser

Feb 04, 2016 at 21:57

Quick reply to Jeremy: we just don't know. It will, I guess, depend on whether there are already reciprocal arrangements with different countries, regardless of whether they're EU members (even though they mostly are).

To the meat of the proposal, it's OK as far as it goes, although there's a good argument for boosting the initial uprating, to 5% or more, and the slowing the succeeding proportions.

Ay least this unjust discrimination looks one the way to being ended. With Letwin and Rayner coming in behind Gale, there's more movement on this than we've ever seen before.

The main sufferers I know are in Canada and Oz -- and it never occurred to them how poorly they'd be treated.

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Sai Lang Kham

Feb 05, 2016 at 03:18

If I choose, having paid National Insurance contributions throughout my working life, to live in one of an arbitrary list of countries, my pension is uprated. If, instead, I choose to live in a country not on this 'list', my pension is frozen. At the same time I'm denied the use of the National Health service, though that's a rapidly diminishing benefit. My income is still taxed in UK and, when I pop my clogs, I suffer IHT on my worldwide assets. That's British citizenship for you.

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Hugh M

Feb 05, 2016 at 04:23

It's all been said above. Can't think of anything further to add.

Except maybe, to blame one particular government or party is wrong. Successive governments from all parties have refused to even consider correcting this injustice. However, I'm disgusted to see that a majority of Tories obviously voted No and a majority of Labour abstained in the division.

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john west 10

Feb 05, 2016 at 06:07

Yes totally agree with GM and JD and it so obvious to us all and even a layperson would understand this and yes barbaric and totally discriminatory.

It makes my blood boil when you see the Pensions Minister Ros Altmann making very frankly stupid comments and note Cameron wanting to pay even more for the refugees and simply put they are much more deserving to receive benefits, for absolutely zero contributions (not one Penny!!! ) Absolutely vile and disgusting.

Also noted that the vote in favour yesterday 297 v 73 in favour and Labour apparently abstaining and yes just as bad as a yes vote. How thes politicians can get away with so many lies, whilst lining their own pockets. My blood boils it really does

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john west 10

Feb 05, 2016 at 06:22

Yes Hugh M 300 per cent agree and totally correct. How on earth can they sleep with their lies and cruel discrimination and barbaric policies and you are absolutely right all parties are to blame, but also to abstain is really like a yes vote. DISGUSTED BUT NO SURPRISE AND REFUGEES AND OTHER GET EVERYTHING FOR ABSOLUTELY ZERO CONTRIBUTIONS.

OH WAIT THIS MONEY COMES OUT OF ANOTHER GOVERNMENT DEPARTMENT BUDGET!!! DISGUSTED AND THE BRITISH NATIONAL IS NOT MORE IMPORTANT AND PAID FOR WELL OVER 40 YEARS AND MORE FOR THE SAME PENSION. SCANDELEOUS.

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john west 10

Feb 05, 2016 at 06:30

Hugh M On my last post and yes agree with you.

Ofcourse the Tories voted yes for this policy of keeping pensions frozen, but knew full well what you meant

Yes end of the day the Frozen Pensioner does not matter, over many "refugees" and many form our own UK subjects getting all the benefits going ie getting a bigger house, because they have 10 children and many other benefits to help them.

DISGUSTING!!!

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Ozpom

Feb 05, 2016 at 08:21

So the UK Government is considering uprating 550,000 overseas frozen pensioners by 2.5% a year. Meanwhile, the 650,000 British pensioners living in the USA, Turkey and very many other countries, but NOT the commonwealth, receive the full British pension as if living in the UK.

If that isn't discrimination then what is?.

How can the Govt. have the gall to offer Annie in Sydney the princely rise of 25 pence on her FULL British pension of just £6 a week! Or just £1- to the WW2 veteran on £40 a week. This is derisory and not the fairness they or their VOLUNTARY non profit pension organisations have been fighting for.The oldest and longest contributing members to these organisations are on the lowest pensions and have suffered the most, but at 2.5%. will receive the least.

Only the newest pensioners will benefit.

Nothing short of full parity with the other 650,000 overseas pensioners is fair or acceptable, so the fight for PARITY with them, will and must continue.

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john west 10

Feb 05, 2016 at 09:22

Victor

People suffering in Thailand and South Africa amongst others. Amazing that an expat in the USA can get an annual uplift and many instances in The Caribbean and next door countries one gets the uplift, but it's neighbour is frozen. Total barbaric and darn right total discriminatory.

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Money Spider

Feb 05, 2016 at 10:12

It's good to see what looks like some progress, compared to successive governments (of all colours) kicking this into the long grass. The division of countries affected and not affected really does seem largely random e.g. ex-pat. pensioners in USA, Turkey, Israel, The Philippines, Mauritius get up-rated, but not those in Canada, Australia, New Zealand, India or South Africa.

The current situation cannot be justified morally. Partial up-rating is not ideal (for those affected) but at least it would stop this injustice being further perpetuated.

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Jeremy Stanford

Feb 05, 2016 at 10:35

The division possibly goes back to Edward Heath's original deal with the EC Commission, as those non-uprated are all Commonwealth countries.

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Sai Lang Kham

Feb 05, 2016 at 11:43

Barbados, Bermuda and Jamaica are not frozen.

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john west 10

Feb 05, 2016 at 13:18

mY COMMENTS ARE VALID AND POLITE WHUY NOT INCLUDED PLEASE?

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Mike R

Feb 05, 2016 at 13:23

Dont remind Ian Duncan Smith of DWP, I expect they still also get winter Fuel allowance as well.

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Sai Lang Kham

Feb 05, 2016 at 15:03

The Australian Government web-site notes that the International Social security Agreement with the UK ended on 1 March 2001. Meanwhile Australia has an interesting list of those countries with which it has agreements. A new agreement with India commenced on 1 January 2016 and an agreement with Estonia was signed on 14 September 2015. So the problem does not lie with them.

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RobtheFox

Feb 05, 2016 at 15:25

George Morley and Jane Davies seem to have covered most aspects of this possible breakthrough but the main objective must be the total abolition of the frozen pension policy.

Mike R - you mention the Winter Fuel Allowance but I think you are probably aware that this is not payable to pensioners in frozen territories - even though on Christmas Day in Calgary it was minus 24C!

Jeremy Standford - should the UK exit from the EU the situation, as George Morley says, could be very difficult because although there may have been reciprocal agreements with individual countries these would I suspect have lapsed on both parties becoming members of the EU. However, and this relates to something Vıctor Lanser also raised, the DWP confirmed ın an FOI that a reciprocal or bilateral agreement is not necessary in order to implement index linking; the UK government can do it unilaterally.

Victor you mentioned that Canada and Ausralia seem not to realise how badly they have and are being treated. In 1976 Canada made a Social Security and Welfare agreement with the UK but the latter would not accept the pension arrangements as they stood. Canada changed its system and introduced new legislation and sought to include this aspect in 1979; the UK refused and have done so ever since despite constant Canadian pressure. Australia tore up the agreement in 2000 because the UK would not include pension arrangements. They have sought in recent years to get an agreement but Duncan Smith reneged on an agreement to open discussions. Both countries and their taxpayers are subsidising the UK; the cost to Australia being over £80 million a year in ensuring some frozen UK pensioners are not below the poverty line.

Jeremy Standford I don't think this has anything to do with Edward Heath as index linking in some countries pre-dates the payment of pensions world wide from 1956 and the advent of the EEC as well. Although the affected pensioners live mainly in Commonwealth countries the frozen pension policy also ıncludes others in some 120 non-Commonwealth ones too.

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Jane Davies

Feb 05, 2016 at 15:29

Just to clear up a couple of points, this policy of discrimination goes back much further than liar Heath it goes back around 60 years.

The DWP have had to admit, through FOI requests, that no reciprocal agreements are needed to unfreeze the 4% of pensioners affected by this injustice it is purely down to the political will to do so. Having said that the DWP still use this lie as an excuse. Meanwhile, as politicians ignore their plight, thousands of seniors sink further into poverty as they lose thousands of pounds of their pension money over the decades.

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Ozpom

Feb 05, 2016 at 17:06

Let's reveal the true value of this Government "con" for that is precisely what it is., Any "fears" of a claim for back- payment can easily be dispelled by an act of Parliament and a signed disclaimer by the recipient when receiving a fully uprated pension.

It is not acceptable, when giving the frozen pensioner an increase of 2.5%, to say"well something is better than nothing"

Try telling that to Annie in Australia when giving her the princely sum of an extra 25 pence on her £6 a week British Pension.Or the WW2 veteran when he is offered an extra £1- yes one pound on what was a full pension and is just £40 a week.

Certainly uprate by 2.5% these frozen pensioners, who have been waiting for very many years on a pension that has depreciated every year until it is now worth a small fraction of the 100% Pension for which they they originally contributed. Firstly however bring their pensions into line with the 650,000 overseas British Pensioners who have always received a full British Pension and updates.

To demonstrate the unfairness of this, consider the position of twins where one lives in Vancouver, Canada and the other a few miles over the border in Seattle USA. Even though they both paid the same contributions and moved overseas at the same time, many years ago, the twin in Seattle would be on a full British Pension of £115 whilst her twin in Vancouver would still be on the original £40 a week when they had both received their first pension payment.

this offer of 2.5% on the dramatically reduced frozen pension is outrageous and those suffering the most and longest will receive the least. The only true beneficiary of this will be the very latest and new pensioners.

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Justin Forawurd

Feb 06, 2016 at 04:11

Previous contributors to this thread have made excellent points on the unfairness, the injustice, the discrimination, and the downright cruelty that is the UK's frozen pension policy.

Frozen OAPs make up just 4% (550000) of UK's total pensioner population, and when spoken or written about, I believe it's assumed that these vulnerable people are the only ones affected. Not so!

The DWP go to great pains to state that "The British State Pension is payable worldwide, but only uprated where there is a legal requirement for it to be"

So who does this affect? Of course it affects existing frozen pensioners, and it could affect pensioners in EU in the event of a Brexit. But it also affects the ENTIRE UK POPULATION by limiting their choice of where to live in their retirement.

UK is the ONLY COUNTRY IN THE WORLD amongst others with a similar pension system to do this.

So when you think of 'frozen pensioners' think of the disgraceful suffering of the existing ones, but more than that, think of the hideous and unjustifiable law that lurks in the background - a hidden law that stupidly penalizes ALL of UK!

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clive walford

Feb 06, 2016 at 04:28

Ms Altman said the DWP did not have the Money to agree an uprating.

So where is the national Insurance fund? Basically the fund was set up, (as a secure fund), for, and is still, for the payment of the state pension, (plus a few other payments including payment for the NHS), collection of contributions and any exceptional payments that may arise. The balance of the fund according to GAD by 2016 is forecast at £30 billion. (The cost of uprating all frozen pensions is around £600 MILLION).

If, however, the fund is empty then the government has failed in its duty to maintain that balance as required.

Ms Altmann, as Mr Gale MP reports is “supportive of the cause”. (As was Mr Webb, the previous Minister, before he was elected, strangely when becoming Minister he suddenly declared we cant afford it).

if Ms Altman as Minister supports the cause then surely this suggests the frozen pension policy should be removed. If resorting to the treasury for money should she not argue that if they can afford £11.4 BILLION for overseas aid they surely can afford what is a minute percentage of that to give aid to those overseas expat pensioners.

The organizations campaigning for the parity for all pensioners have said time and time again that they are not and will not campaign for retrospective uprating. Of course odd individuals might try but would not get any support from those groups and most other “individual” pensioners. Does it not appear that the DWP is clutching at straws to reject uprating?

(With holding increases to (some) overseas pensioners is currently legal. Amend the regulation so that all pensions are equal but retrospective uprating is not permitted. That satisfies the government argument. The likelihood of anyone trying to campaign for retrospective uprating is infinitesimal.

A ‘compromise’, yes but to agree to consider it again indicated the governments acceptance of the need to put things right. A compromise is better than nothing. It is a solid base to work on and at the same time giving some small help to those frozen pensioners struggling to survive.

Ms Telford said, ‘It is wrong for people to be denied pensions they paid for,’. Well Mr Cameron in his electioneering to “the older” population said of the pension “what you put in you get out”.

The shadow ministers support of the campaign saying it, (the policy), is unfair and illogical is just being honest. Unfair in-equality. (Equality being the government policy). illogical because there is no real foundation for it to continue. Financially there is no argument, as figures from campaigners prove. No Agreements? As the Old minister stated, confirmed by the FOI and as far back as The 1966 DSS Memorandum to the Social Security Committee.

16. Reciprocal social security agreements are not entered into solely with a view to paying annual uprating increases to UK pensioners living abroad. They are not strictly necessary for that purpose as uprating can be achieved through UK domestic legislation….. they are not required!

One finds it difficult to find any reasonable cause for not uprating.

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Hugh M

Feb 06, 2016 at 05:28

Jeremy Stanford. Non uprated countries are NOT all commonwealth countries. Take a look at the list or the map.

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clive walford

Feb 06, 2016 at 07:09

Ms Altman said the DWP did not have the Money to agree an uprating.

So where is the national Insurance fund? Basically the fund was set up, (as a secure fund), for, and is still, for the payment of the state pension, (plus a few other payments including payment for the NHS), collection of contributions and any exceptional payments that may arise. The balance of the fund according to GAD by 2016 is forecast at £30 billion. (The cost of uprating all frozen pensions is around £600 MILLION).

If, however, the fund is empty then the government has failed in its duty to maintain that balance as required.

Ms Altmann, as Mr Gale MP reports is “supportive of the cause”. (As was Mr Webb, the previous Minister, before he was elected, strangely when becoming Minister he suddenly declared we cant afford it).

if Ms Altman as Minister supports the cause then surely this suggests the frozen pension policy should be removed. If resorting to the treasury for money should she not argue that if they can afford £11.4 BILLION for overseas aid they surely can afford what is a minute percentage of that to give aid to those overseas expat pensioners.

The organisations campaigning for the parity for all pensioners have said time and time again that they are not and will not campaign for retrospective uprating. Of course odd individuals might try but would not get any support from those groups and most other “individual” pensioners. Does it not appear that the DWP is clutching at straws to reject uprating?

(With holding increases to (some) overseas pensioners is currently legal. Amend the regulation so that all pensions are equal but retrospective uprating is not permitted. That satisfies the government argument. The likelihood of anyone trying to campaign for retrospective uprating is infinitesimal.

A ‘compromise’, yes but to agree to consider it again indicated the governments acceptance of the need to put things right. A compromise is better than nothing. It is a solid base to work on and at the same time giving some small help to those frozen pensioners struggling to survive.

Ms Telford said, ‘It is wrong for people to be denied pensions they paid for,’. Well Mr Cameron in his electioneering to “the older” population said of the pension “what you put in you get out”.

The shadow ministers support of the campaign saying it, (the policy), is unfair and illogical is just being honest. Unfair in-equality. (Equality being the government policy). illogical because there is no real foundation for it to continue. Financially there is no argument, as figures from campaigners prove. No Agreements? As the Old minister stated, confirmed by the FOI and as far back as The 1966 DSS Memorandum to the Social Security Committee.

16. Reciprocal social security agreements are not entered into solely with a view to paying annual uprating increases to UK pensioners living abroad. They are not strictly necessary for that purpose as uprating can be achieved through UK domestic legislation….. they are not required!

One finds it difficult to find any reasonable cause for not uprating.

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john west 10

Feb 06, 2016 at 08:08

I will try again and completely agree with JD and Gm and it is scandeleous how this total injustice has been allowed to go on for many many years and about time we get the same pension and uplifting each year. We are not asking the World and it would not cost that much, when one considers the billions spent on foreign aid etc etc and benefits to all and sundry. This barbaric and totally discriminatory.

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Jeremy Stanford

Feb 06, 2016 at 10:50

#Hugh M. I understand that now. I should have checked my DWP Notes. Non-uprating is a wide issue, though my own concern is for the implications of a Brexit. Perhaps the forthcoming referendum will help widen the debate.

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Mike R

Feb 06, 2016 at 11:11

First things first you may as an ex pat , even if in Europe not be afforded by DC a vote in any referendum . But the referendum seems to be hinged on Camerons deal or lack of it in Europe on Migrants and welfare payments . . Such a narrow issue to have any UK wide referendum on to leave or stay in the EU.

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James Tilley

Feb 07, 2016 at 10:56

So Sir Roger Gale reports "Ros Altmann said this is not something the DWP can deal with... the DWP has not got the money",

How then can the Baroness claim DWP has not the money when the very latest forecast by the Government's actuary of money in the NI account at end March 2016 is approaching Pdns 29Billion!! Moreover although money is regularly paid out of that account for pension payments, money flows into the account on at least a weekly basis for NI contributions taken from British peoples wages and salaries. I wonder if the Baroness is aware of this?

Otherwise all that has been written above is so true of the appalling nature of this British pension policy which one MP, Keith Vaz, has labeled "economic foolishness". One has to consider the overall impact on the British budget and not just the DWP's spending budget.

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clive walford

Feb 19, 2016 at 10:16

From all the comments, from all the supportive evidence it is clear that a 70 year old policy freezing some pensions is outdated, immoral and unjustifiable. there is no fairness or equality in such a policy. The future of every worker in he UK paying mandatory NIS contribution is threatened by this policy. the Pension Act 2014 part 1 section 2 makes it clear that your state pension is an entitlement only restricted by your contributory years. Political decisions made years ago have been proven wrong. (RAs are not required). the cost and benefits are drowned out by political mumbo jumbo.

You the people elect a government to govern for YOU. not party orders. this is supposed to be a democracy not a dictatorship where "the Party" orders MPs which way to vote.

let us hear how today's workers feel about having their pension frozen, if in 20. 30, 40 years time they want to retire to a country where this outrageous policy is currently imposed.

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Ozpom

Feb 19, 2016 at 12:39

So the Minister claims that the money isn't there, to give the frozen pensioner the same pension as the other 650,000 British Pensioners living overseas already receiving an identical pension to those living in the UK

So catastrophe!

What would happen pray, if ALL the frozen pensioners had never left in the first place? Or alternatively returned permanently to the UK- as I and others have done.

We would hear no more of this nonsense that the Government can't afford it.

The Government would HAVE to find the funds, which should already be there anyway.Of course the Government are gambling that these pensioners won't or can't all return

BEFORE they moved overseas many of the now frozen pensioners were already receiving a FULL PENSION. Others living overseas continued to pay their contributions annually directly to the DWP. However when their pension is paid overseas to certain countries it never ever increases and they are still on that same pension which is “out of date” by decades.

Holidaying in the UK or to an unfrozen country results in the frozen pension being unfrozen during that period.providing they inform the DWP. However when the frozen pensioner returns after the holiday, their frozen pension returns too-- to the unfrozen amount!

Approximately £4,000 annually is saved by the Government on each frozen pensioner, because they don’t used the NHS, bus passes, winter allowance etc. The Government should totally unfreeze and encourage more to emigrate.

Offering them 2.5% on their frozen pensions amounts to a few pence or a pound or so a week and is an absolute disgrace and NOT at all what they and their voluntary organisations have been fighting for all these years. THE FIGHT FOR PARITY WITH THE UNFROZEN PENSIONER MUST AND WILL CONTINUE.

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George Morley

Feb 19, 2016 at 17:36

It would seem that in line with the Frozen Pension policy that any UK pensioner taking a holiday to any 'frozen' country should have some deduction made to support their policy.

This suggestion is just as immoral and stupid as the current policy imposed on all frozen pensioners who qualify for the uprated pension in every respect due to their contributions.

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clive walford

Feb 20, 2016 at 05:13

Ozpom wisely points out a fact that not all frozen pensioners realise and use. Go on holiday or visit an unfrozen country get your full entitled, (paid for), pension during that stay. , Of course the question is why do you not get your full entitlement, (which is only dependent on your contributory years. See part 1 section 2 of the Act.) when you return to the frozen country? Little, politically motivated, back doors, (like clause 20 of the new Pension Act 2014), allows unjustifiable withholding of up rating for half of the overseas pensioners.

George M. suggests a most immoral and stupid thing would be to deduct some amount from pensioners visiting a frozen country. Shame on you George. Fancy putting such a ridiculous idea forward. it has no doubt got some DWP/Treasury puppet now searching frantically for a way to implementing such a scheme!

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Ozpom

Feb 20, 2016 at 09:16

Sorry I made a typing error.

When the frozen pensioner returns from their holiday in the UK or another unfrozen country where they have received a full pension during the holiday, their pension returns to the FROZEN pension, NOT unfrozen as I stated.

A good cynical point made by George Morley about reversing the procedure when an unfrozen pensioner visits a frozen country.

Incidentally if we come out of the EU, that will open a can of worms, for I very much doubt if the UK Government would dare to start freezing the pensions of the British pensioners living right on their very doorstep in the EU. Then there really would be local outrage which could help our cause or the UK would be swamped by returning Brits with all the other increased costs to the Government.

Meanwhile what a magnificent and generous gesture by the DWP to even consider an annual uprate of 2.5% on the now tiny frozen FULL pensions the frozen pensioner receives after so many years. The increase of 75 pence from £30 a week to £30.75 or £50 to $51.25 will no doubt greatly excite them --even if it ever happens.

It could help them buy a newspaper ---for 1 or 2 days OR even 10-20 tea bags!

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George Morley

Feb 21, 2016 at 05:04

But Clive, the pensioners that it would affect are living next door to the politicians and as it would affect so many, then perhaps those affected would then see the problem from the frozen pensioners viewpoint and joined forces would really give them a headache.

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clive walford

Feb 21, 2016 at 17:58

A good point George M. Perhaps the campaigning groups should start a parallel campaign to deduct an amount from pensioners holidaying in a frozen country until the frozen pension policy is finally discarded! The fact that only 4% of pensioners are frozen reflects in the level of UK support. (This level is rapidly rising though as more MPs and the public learn the truth of the matter rather than being fobbed of by DWPs 70 year old excuses). The partial uprating scheme would of course mean holiday makers would not be “fined” for holidaying in frozen countries, and those UK pensioners be more supportive to the campaign when they realise how they could be caught up in it.

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clive walford

Feb 21, 2016 at 18:51

ozpom suggests the UK gov. would not dare to start freezing EU pensioners.

Consider this possibility sir. If the UK comes out of the EU the EU rules and regulations made that bound the UK to uprate pensions in the EU would need to be revoked. In my field of legal dealings with regulations if I introduced a new regulation, (as was to go into the EU), the previous regulations would have been revoked by that new regulation and could not later be resurrected. (a new “old” reg would have to go through all the legal requirements to reintroduce the old contents).

So uprating could not be done by the EU legal requirement, (now defunct if we are “out”), nor by the previous Reciprocal Agreements revoked under the EU “in” ones. Result would be the regulation 3 and clause 20 would come into action and the EU pensioners join our club. The DWP/Gov would not have to do anything. No doubt they would throw up their arms in mock horror and say, “oops guys but it is the existing laws, we have not brought in anything new to screw you all”. Of course they would promise to rectify the matter as soon as politically convenient.

Would returning Brits flood the UK? If you have been “bedded” in for years and are perhaps getting on a bit would you really want all the trouble of upheaval? Your pension would be frozen but if the partial uprating is operating you wont lose out much there. I can’t quote figures but I suggest there are quite a few people return to the UK from Europe for medical treatment as it is. I know my niece and her husband living and working in Italy have done that. To quote my niece, “driving over to the UK next week to see the doctor/hospital appointment. Can catch up with the family and have a “girlie” day out shopping”.

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George Morley

Mar 13, 2016 at 05:19

As a householder one does not give to a neighbour or friend unless one has the money to do so, why then does the government give so much in aid when they cannot afford it. It makes no sense, not to mention the unmentionable EU contributions at 55 million every day and we care talking about just 11 days payments ? The government are saying that we cannot afford to be in the EU !

For goodness sake Cameron do your sums and if you are concerned about retrospective payments then make a law like you have done to stop us getting the uprating today. Just who is running this country ?

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clive walford

Mar 13, 2016 at 10:35

Since the article,” Breakthrough for 'frozen' pensioners living abroad”, appeared on February 4th. 2016, there has been a steady input of comments on the “breakthrough” and the frozen pension policy itself.

Would my summary be about right?

1).

Cabinet Office Oliver Letwin has agreed the Cabinet Office will crunch the numbers for a partial uprating. He has not yet agreed to consider the actual plan to partially uprate, just the numbers at this stage.

2)

There are approximately 12 million UK State Pensioners.

3)

Those pensioners were all required to pay the mandatory NIS contributions during their working life.

4).

The Pension Act 2014, Part 1, section 2 states that they entitled to the State Pension depending on their reaching pensionable age and the number of contributory years.

5)

In Part 1 section 2 of the Act, there is no condition applied as to where that person lives.

6)

Of the 12 million pensioners, 1.2 million live overseas.

7) Roughly half of that 1.2 million get the full State Pension as they are entitled to under the Act, (part 1 section 2). As are the 11 million pensioners living in the UK.

8).

The other half, (approximately), of overseas pensioners do not get the pension they are entitled to under the same part 1 section 2 of the same Act. Their pension is frozen to what it was the day they moved overseas. (This could be 30 years or more).

9). in the pension Act 2014, section 19 and 20, (grouped together under “Prisoners and Overseas Residents”) section 20 states:-

(1) Regulations may provide that an overseas resident who is entitled to a state pension under this Part is not entitled to up-rating increases. [ NOTE>there is no justifiable reason given in this paragraph 1 for not uprating].

(2) In this section “overseas resident” means a person who is not ordinarily resident in Great Britain or any other territory specified in the regulations.

- - meaning all persons living overseas are not entitled to uprating increases unless they are living in the UK or in a territory specified in that regulation. The specified territories are currently those where there is specific legal requirement, (as with the EU), or where there is a Reciprocal agreement. That regulation, not the Act, can be amended to include ALL overseas living persons.

10). the Government's actuary of money in the NI account at end March 2016 is approaching £29Billion! The fund therefore negates the Ministers statement that there is no money available for uprating.

11). the NIS Fund was set up as a secured fund for the collection, payment of pensions, and some associated payments, AND FOR EXCEPTIONAL SITUTIONS, and was not for other purposes.

I see those as the actual facts of the case.

So what points can we argue?

a). Section 20 contradicts section 2. It does not give specific reasons for not uprating. It gives only territories where uprating will be allowed. Where a person lives is not relative to a person’s entitlement to a pension according to section 1.

b). What is the state pension? The state pension increase each year. a non frozen pension increases. So the pension for 2010 is £x. for 2011 it is £y not £x plus. For 2015 it is £z not £x plus increase for 2011 +increases for 2012 etc. Difficult to argue this one. Can a frozen pensioner say “I do not receive the state pension; I receive the outdated state pension of 20 years ago?”

c). Why does the Minister/DWP still insist on using RAs as a reason for not uprating, when in 1966 the DSS stated RAs are not strictly necessary for uprating, the then Pension Minister, Mr Webb in 2011 in an official statement to my MP stated “RAs are not required to uprate pensions- it can be done by domestic legislation”. The following year the FOI also confirmed it.

Knowing RAs are not a legal requirement it is not a legitimate reason for withholding uprating. The regulation therefore is based on a nonfactual reason and should be revoked. The DWP will say that the regulation is the law. The legal experts will need to dissect that one.

d). in two cases a judgement was that cost was not an acceptable reason for discrimination. Can we strongly argue the policy is in fact discrimination? Overseas pensioners are divided into two groups. To withhold uprating for one group based on a list of countries where there is an RA, but where RAs are, as recognised by the DWP, as not a legal requirement to uprate pensions, is this not unjustifiable discrimination?

e). the DWP argue that the policy regulations have always been the case for not uprating. A 60 odd years old regulation does not fit in with the current way of life, work and travel and needs revoking to keep with modern times.

f). the DWP/Minister still argue that there is no money available, or in Mr Webbs words “we cant afford it”. Regardless of the money that should be available in the NIS Fund a comparison of costs for uprating, against government pay-outs to overseas aid, and a list of other schemes which the UK contribute to, will show up that uprating is a very small drop in UK expenditure. This difference in cost is an important factor in the campaign.

g). Virtual savings to the government needs to be proved with little doubt. Overseas workers numbers, (hundreds of thousands), need to be established where the argument to return to the homeland on a frozen pension or stay in the UK, (and bring the family), with the annual increase and other benefits becomes a big factor.

h). The Pension Ministers comment that 25% of cost of uprating in Australia would merely go to the Australian government needs comparing with how much the Oz government has subsidised the UK government for many years in providing the UK pensioners with a reasonable standard of living. Also applies to Canada.

We have two main objectives, cost and RAs. There are more including equality, fairness, justice and honour by the “right honourable” MPs.

The in or out of the EU effects on EU living pensioners seems to have got the Minister in a lather. From my experience with SIs’, regulations and Orders it would not be a big problem. If out, the EU “laws” will be revoked, they should, in their making, have revoked any other Sis or RAs, where they referred to the Payment of the UK state pension. The pensions should then be as per the Pension Act. The only requirement necessary is to revoke the section 20 regulation.

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RobtheFox

Mar 13, 2016 at 11:38

Clive the only comment I would make on a comprehensive appraisal is in respect of paragraph 8 which is not totally correct. The pension is frozen at the appropriate rate from the day it first becomes payable in the frozen country. If someone has moved abroad at the age of say 55 years the basic pension is based upon the number of qualifying years accrued and index linking will continue to increase the pension until it is first drawn. Equally a person who has moved abroad my continue to make voluntary contrıbutıons in order to accrue further qualifyıng years and protect their basic pension right.

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George Morley

Mar 13, 2016 at 15:06

There are many good comments made here and the politicians cannot be so blind surely to not see the light.

Basically what we have is theft of a pension right by the very people who should be defending that right .

The politicians are elected by the people to serve the people in an honest way with probity and justice but have failed to react to this problem of their own making by being shortsighted in the first place and then trying to hide the truth by discriminative legislation bringing successive Governments over the years into a state of disrepute and ignoring their own code of conduct in doing so.

To now seek a solution by partial uprating is adding insult to injury by treating those who have suffered the longest with the smallest increase thereby making the situation of discrimination even worse than it was before.

To then cry poverty when the actual poverty is with the pensioners affected is an even bigger crime and a false statement as has been said.

There has never been any attempted justification given for employing this policy that has not failed when under scrutiny.

Using the excuse that granting any concessions to the frozen pensioners would then open the door to a demand for backdating is a pathetic way of trying to maintain the status quo and to take the partial uprating path when they have the power to make a law to deny any such claim in the future shows a gross lack of understanding of their job as servants to the electorate by their own decision to take up the job in the first place.

Granting pension parity would see the UK joining every other democratic country with similar pension systems.

Given a few years on, this issue will then be a couple of lines in the history book like votes for women, hanging and same sex marriage but the future pensioners will be all treated with the same respect and equality like those now receiving their rightful fully indexed pension.

It is just a question of honesty , morality and equality by the current politicians who expect that treatment for themselves but are denying these few is unacceptable.

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Ozpom

Mar 13, 2016 at 19:42

A truly excellent summary by George Morley.

Partial uprating is disgraceful and will only benefit the new pensioners. It makes absolutely no attempt to make any meaningful uplift to the pensions of the elderly pensioners who in many cases have been waiting for 30 years or even more, for any indexation to their UK State Pension...

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