Stupid rules lead to apartheid of British overseas pensioners

At this time when George Osborne is considering removing the Personal Tax Allowance from Brits who retire abroad to spend their final years with their families, many of whom have their state pensions frozen as a result, you might be wondering what all the fuss is about? You might be thinking that there are some countries such as Afghanistan, or Libya, or Syria where the government is right to limit any British funds. A counter argument is, of course, the ethical morality – something in which the Conservatives are supposed to believe - of a contributory pension scheme which forces all workers to pay National Insurance all their working lives to provide a pension in retirement, only to find those pensions frozen when they join their families overseas.

And all of this discrimination is the result of crazy, stupid, historical anomalies.

Another result is that immigrants who were invited to come to Britain from the Caribbean countries in the 1960s can go home with an indexed pension if they came from Barbados, Bermuda or Jamaica but will have their pensions frozen if they return to Bahamas, Barbuda, St Lucia or other Caribbean countries; people can retire to Israel and the Philippines with indexed pensions but not to India, Bangladesh and Pakistan. Similarly, retirees to USA receive indexed pensions; while over the border in Canada they do not.

The following tables will enable you to check on countries that may interest you. They certainly illustrate the totally illogicality (admitted by a number of ministers) of the present system.

Frozen pension countries:

By comparison:

EU Member States                                                 Reciprocal Agreement Countries ***
Pension paid and indexed annually:                      Pension paid and indexed annually:

***        The Department for Work and Pensions has recently admitted that a Reciprocal Agreement is not legally necessary for uprated pensions to be paid to all British pensioners.

A recent survey has shown that there are thousands of previous immigrants who want to go back to their countries of origin, but cannot because they could not survive on frozen pensions. Yet they would vacate homes in England that are desperately needed and each one would also save taxpayers an estimated £3,800 a year in benefits such as NHS treatment, TV licences and free travel. Think of the pressure it would take off the NHS if these thousands left the country.

To add insult to injury, it costs the Treasury at least £1 million a year to manage the disparity between pensions. Also, while the Chancellor is quietly penny-pinching on taxes and, in the process, robbing every working household in the UK of hard-earned income, he could save an estimated £2 billion a year by “doing the right thing” and paying indexed pension to every British pensioner – payments which they paid for during their working lives and deserve now.

Such discrimination against a certain group of citizens was called apartheid in South Africa – it is certainly British pensioner apartheid now!

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