Expat state pensioners hope for index-linked increases

Good news for half a million expats: two Tory MPs, Sir Peter Bottomley and Sir Roger Gale, are attempting to push through a Pensions Bill amendment that could see all British pensioners entitled to index-linked state pension rises.

There remains huge inequalities for expats, for example, in Canada and New Zealand currently - some receiving as little as £20 a week.

Not so hot

A full basic UK state pension is worth £110 a week. But some expats, depending on where they live - Australia and The Falklands, for example - do not receive inflation-linked rises to their pensions as they are frozen from the time they retired.

The injustice appears considerable. The International Consortium of British Pensioners (ICBP) claims there are approximately 555,750 pensioners - around 4.4% of Britain's total pensioners - with pensions frozen at the rate when they first emigrated, regardless of exchange rate fluctuations.

But nearly 5.3% of pensioners (635,300, approx) who emigrated to Europe, the US, Jamaica and over 40 other countries, do have their pensions indexed annually, as if they had stayed in Britain.

The ICBP cites British pensioners Geoff and Doris Dancer who live in Ottawa. Reaching 65 in 1986, Mr Dancer - he worked in the UK for 44 years - qualified for a 100% state pension of £38.30 per week, the same amount he still receives today. Over time, the Dancers reckon they have lost more than £40,000 of their pension in the last 20 years alone.

EU slapdown

No change in reciprocal agreements would be required to rectify a change, just a vote in Parliament to rescind the situation, claims the ICBP. "The removal of this pension anomaly would cost less than 1% of the benefits budget".

There has been an attempt to force the British government to settle the disparity before. In 2010 the European Court dismissed an appeal by 13 expats who argued that the UK government was breaching their human rights by not uprating their pensions.

Meanwhile the Government has argued a rise in UK inflation does not reflect the inflation rate in other countries, and that taxpayer cash should be targeted at those living in the UK, rather than those who have voluntarily chosen to leave the UK.

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