UK parliamentary debate agrees motion to axe frozen pension rules

Published:  24 Apr at 6 PM
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MPs at an admittedly poorly attended House of Commons debate have voted to agree a motion – British parliamentary language for a formal proposal – stating the hated policy of frozen pensions should be axed immediately.

Activists who’ve fought for years to get the rule reversed have called it by various uncomplimentary names including ‘Britain’s dirty secret’ and ‘a national embarrassment’, but haven’t managed until now to put a dent in the government’s determination to keep it on the books. Over half a million British state pensioners living overseas are at present affected, and Brexit will ensure the numbers are added to by up to a million UK taxpayers.

The debate, held yesterday, not only passed the motion but also resulted in a call to parliament to include the change in its June election manifesto. However, if agreed, legal formalities would not be concluded until this summer. According to Labour Party leader Corbyn, the government has no obligation to spring into immediate action, even although some 1.5 million expat pensioners are registered to vote, but the fact that frozen pensions are likely to affect even more Brit expats living in EU member states makes the case for the landmark reform stronger and even more urgent.

According to recently issued figures, some 542,565 state pensioners living outside the UK are affected, with 474,721 who live in EU member states getting the updates due to EU rules. Elderly Brit expats enjoying updated pensions in the 16 places in the world with bilateral agreements with the UK total just 189,334, with the last bilateral agreement signed 36 years ago.

Conservative MP and long-term activist for the reform Sir Roger Gale stated in parliament the ruling had caused ludicrous situations across the world. For example, he said, a British state pensioner living on the Canadian side of Niagara Falls has his pension frozen, whilst his equivalent living on the USA side of the falls does not. Referring to government reports that reversing the rule would cost ‘billions’, he said the amendment supported by the all-party parliamentary committee would cost just £33 million as it does not allow for backdating. In his reply,

UK pensions minister Richard Harrington stated the rules were straightforward and had been in place for 70 years. The government, he said, has no legal obligation to upgrade the pensions of British citizens living overseas, adding matters concerning pension entitlements are usually a normal part of calculations made when pensioners move overseas.

Source: International Investor
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