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silvergoldmagazine . ca
THE FROZEN BRITISH STATE PENSION
– By Peter Sanguinetti , member , CABP
There are 12.5 million British State pensioners , and of that number , just over one million live outside the UK . Half of these one million , will receive their pensions index linked and therefore are recipients of the annual cost of living awards , while the other half will not . Their pensions are ‘ frozen ’ simply because of where they choose to live in retirement . Commonwealth countries are home to 98 % of ‘ frozen ’ pensioners , and this includes the more than 157,000 who live in Canada .
The pension is based on the number of National Insurance contributions you have made during your working life in the UK , including any top-up contributions made from overseas . In a so-called ‘ frozen country ’ the initial amount of pension is never increased . If you are already receiving the pension at the time you emigrate , it is ‘ frozen ’ at that rate .
When you consider what this really means , you will appreciate that the effective buying power of your UK State Pension diminishes as the years go by . And don ’ t think it ends there – the exchange rate comes into play because your pension is calculated in Pounds Sterling , so it will need to be converted into Canadian Dollars . The recent decline in the strength of the Canadian dollar has been to the benefit of the conversion . However , prior to that , the strength of the Canadian dollar and the weakness of the Pound added even more bruising to your already ‘ frozen ’ pension .
Half of the one million British State pensioners who live outside the UK , half will continue to have their pension index linked because they live in countries which the UK has a reciprocal agreement with , for example , the USA . In the case of the European Union , the UK membership automatically ensures that , as a UK State pensioner living within the borders of the EU , your pension is fully index linked .
Brexit changed all that , because the UK does not have an individual reciprocal agreement with the majority of countries that make up the European Union . In the summer of 2017 , when the British Government announced it would only continue to index link the state pensions of those who were living in certain EU countries and not others , there was a huge outcry and the British Government quickly backtracked on its earlier statement , announcing all state pensioners living anywhere within the EU would continue to receive their index linked pension .
MONEY MATTERS
Up until this point , it had always been British Government policy not to index link pensions being paid to UK pensioners if they lived in countries with which there was no reciprocal agreement . Suddenly , the necessity of the reciprocal agreement , which had always been the mainstay of Government policy , only applied to some but not all .
Is it not right , reasonable and fair , to treat all UK State pensioners in the same way no matter where the recipient lives ? In May 2017 , British Prime Minister Theresa May , said , “ My government is committed to supporting people who have saved for their retirement . We are implacably opposed to all forms of discrimination .”
There is a volunteer-driven non-profit organization called The Canadian Alliance of British Pensioners ( CABP ) dedicated to gaining annual cost-of-living increases for all recipients of the British State pension regardless of where they choose to live . The Canadian Alliance has been strengthened because it is now part of the International Alliance of British Pensioners , so British pensioners living in Australia , New Zealand and South Africa are all part of the same non-profit organization with exactly the same goal , that all pensions be paid at the same rate .
Information concerning the Canadian Alliance of British Pensioners can be found through their National Office :
The Canadian Alliance of British Pensioners 202-4800 Dundas Street West Toronto , Ontario , M9A 1B1 Tel 1-888-591-3964 e-mail : info @ britishpensions . com www . britishpensions . com
CABP is an extremely active organization . When visiting the website , readers of this article will be surprised just how much work has been done by the volunteers who are spearheading the campaign to have the injustice of the ‘ frozen ’ pension put right . They need the support of all British pensioners to keep up the pressure on the British Government .
Fueled in part by very widespread positive media coverage , the whole issue of ‘ frozen ’ pensions has received scrutiny in the UK within the past few years , helped also by the issue being adopted as part of the Labour Party manifesto . MPs of all parties are being made aware of the detrimental effect the policy of the ‘ frozen ’ pension has on those seniors directly affected .•
Silver & Gold Magazine ~ SPRING 2018
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