UK pensions abroad

Hello there.

It looks as though the economy is still floundering worldwide doesn’t it? Greece is in a really bad way, with Portugal also having a hard time of it too. Plus of course us here in the UK…

Are you still thinking of moving abroad? If you are, and you are of pensionable age, you need to bear in mind that some countries have reciprocal social security agreements with the UK and you will qualify for the annual rise in pension. However in other countries the government does not give cost-of-living increments to expats living there and your pension will be ‘frozen’ at the initial rate you received for your first pension payment.

It really is important to look at your pension status when making this decision to see how your country of choice handles this, and also how other countries stack up if you are wavering as to where to move. If you would like a complete list of a country’s pension status incidentally, I am able to let you have a comprehensive list on this: just phone Elaine on 0207 898 0549 and ask for it.

What I have found over the years that I have been working for The Overseas Guides Company is that many people start off intending to buy in one country and end up actually buying in another. The reasons for this are varied – it could be cost, input from a new partner, the cancellation of cheap airfares or simply a desire to be nearer the UK.

Many Brits living abroad are saying this is a moral rather than a financial issue. Over half a million British pensioners are currently having their pensions docked because they have chosen to live abroad - this applies mainly to Commonwealth countries, with almost half of affected pensioners living in Australia. What really outrages people is that any MPs now living overseas do not have their official pensions frozen – this in a time of enormous disenchantment with MPs generally, and with their financial shenanigans in particular!

What is so unfair is that the cost of unfreezing is not great, less than 1% of the annual cost of paying pensions. Says James Nelson of the British Australian Pensioner Association “This is not just a financial matter. The main argument for unfreezing is a moral issue, a question of justice. Pensioners in frozen countries have met the same conditions as those in unfrozen countries.”

This effectively means that thousands of pensioners who would love to be living nearer their family or friends abroad are unable to do afford to do so because of this and are forced to spend their old age alone in the UK. Of the Commonwealth’s 53 nations, 48 are adversely affected in this way. As someone who lived most of her life in South Africa, may I add that it seems an unworthy response to retirees living in countries that fought in two World Wars for Britain. Now folk are penalised for living there – go figure! We need to get Joanna Lumley on to this!

However, some are not going down without a fight - they have taken steps to have this very unfair system rectified. In November, a lower court of the ECHR rejected the applicants’ case in a 6-to-1 decision, but a referral subsequently was granted. A group of expat pensioners charged the British government with discrimination over its policy of "freezing" the state pensions. The case was heard on 2 September 2009 before the Grand Chamber of the European Court of Human Rights (ECHR) and was subsequently thrown out, but my guess is that we have not heard the last of this.

A spokesman for the UK's Department of Work and Pensions (DWP) said the decision whether or not to "uprate" UK pensions paid to expats has to do with the "reciprocal agreements" that Britain has with some other countries - including other EU members - but not with others. Pensioners who live in countries with which Britain does not have such reciprocal arrangements do not receive these upratings, he added.

Peter Kennan, chairman of the Canadian Alliance of British Pensioners, disputes the DWP argument, noting that some countries with which Britain does not have such agreements - such as Canada - nevertheless boost the pensions of their own nationals living in the UK. "It has nothing to do with reciprocal agreements, and everything to do with saving money," he added.

If you have any questions or queries about pensions abroad you can go to the link below for all information. http://www.direct.gov.uk/en/BritonsLivingAbroad/Moneyabroad/DG_4000013

The section dealing with pensions is:http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/Basicstatepension/DG_10026714

You can write to:
The Pension Service, International Pension Centre (IPC)
Payments - Room TD 111
Tyneview Park, Newcastle upon Tyne, NE98 1BA, England
and the email address is:
tvp.internationalqueries@thepensionservice.gsi.gov.uk
Telephone Number - 0191 21 87777
Fax Number - 0191 2183305
There is plenty of useful information on The Pension Service website at www.thepensionservice.gov.uk

You may be wise to consult an Independent Financial Advisor (IFA) before venturing abroad. If you need any help with finding someone perhaps try phoning the Overseas Guides Company Resource Team on 0207 898 0549 – there is no fee associated with their services yet and they do have people they may be able to recommend.

http://www.emigrationguide.com