In December 2020 an All Party Parliamentary Group published a report on their inquiry into the issue of Frozen British Pensions, a situation facing over half a million British nationals whose pensions were frozen when they moved to a country where the UK is not legally required to increase payments every year.
They came out with a strong recommendation that the UK government end the ‘frozen’ pension policy and provide the pensioners living in ‘frozen’ countries with their full uprated pension as soon as possible, particularly given the recent impacts of COVID-19 on this group.
At the end of 2020 it was reported that both the Canadian and Australian Governments wrote to the UK demanding an end to the frozen pensions regime. Subsequently a meeting was held between representatives of the Canadian government and the Department for Work and Pensions to negotiate a reciprocal social security agreement which would end the freezing of pensions of some 150,000 British pensioners living in Canada. The DWP rejected the opportunity to strike a deal.
Wendy Chamberlain, Lib Dem MP for North East Fife, after consultation with members of Lib Dems Overseas, wrote to the DWP on 31 January 2021 in support of the Canadian request and the case for all frozen pensioners. On 31 March she received a reply from Guy Opperman MP, Minister for Pensions and Financial Inclusion, stating that the government had no plans to change the policy. Both letters are appended.
Comment: The reply from the DWP contained the same standard arguments that have been perpetuated by successive governments for decades. The reply did not address any of the valid points raised by the APPG report. The arguments are flawed for a number of reasons:
- There is no legal reason to have a reciprocal agreement. A pensioner who paid his/her NI contributions in full should have a right to a full uprated pension, regardless of other considerations.
- The European Court of Human Rights had little choice as the UK has the right to make its own laws.
- The letter states that the decision to move abroad is voluntary and a personal choice. It overlooks the fact that many were forced by circumstances to move, such as to join family or take care of elderly relatives.
- It states that advice has been given to the public for a number of years about the policy yet the APPG inquiry found that almost 90% of respondents were unaware of the policy when they moved abroad.
- The letter fails to acknowledge the burden placed on the Canadian and Australian governments to supplement the income of UK pensioners. This should be a source of considerable embarrassment to the UK.
- Neither does it recognise the extreme hardships suffered by many living in countries that do not offer any assistance. In most cases the pensioners cannot afford to return home for reasons of health or disability, or have no relatives or friends in the UK to return to. Those who can return are likely to cost the taxpayer far more for future care than would be the cost of uprating their pension.
- The letter states it has been a long-standing policy. That is correct, but it does not make it right. There have been many other long-standing policies in the past. If they had not been rectified slavery, child labour, discrimination against minorities and many other formerly accepted practices would be alive and well today.
Clearly, no-one at the DWP has ever considered this issue from a moral perspective, the strongest being that half a million UK nationals have been deprived of pension rights that they believed they were earning during their working lives and that the policy has created untold hardships for many.
Lib Dems Overseas Executive