This confirms the expectations of the International Consortium of British Pensioners (ICBP), which has long argued – but until now has never been able to prove – that pensioners who stay home in Blighty because they do not wish to risk having their pensions frozen will more than make up the cost difference to the British taxpayer in other areas, such as healthcare.
Because an estimated 543,000 UK retirees voluntarily live in the 150 countries around the world where their pensions are frozen at the rate that they were when they moved abroad (or first started to receive them, if they were already overseas), the UK government “gains £2.5bn per year in avoided health, social care and benefit costs,” John Markham, UK Director of Parliamentary Affairs for the ICBP, says in a forward to the report.
“Even if full pension parity [were] paid for and all British pensioners around the world [received] annual up-ratings to their British state pension, savings to the government would still be £2bn per year, and total £31bn over the next 15 years.
“To argue that this country cannot afford to provide all those who have paid into the system with their rightful pension in old age is therefore morally unacceptable.”
The report is the latest salvo in the expat pensioners’ long-running battle to get the British government to give them the same pensions they would enjoy if they had stayed home, where pensions are up-rated to keep up with inflation.
The release of the report coincides with the party conference season in Britain, which the pensioners group is making use of to publicise its cause.
As reported, the expat pensioners’ long-running effort to gain pension parity through the court system ended in March, when the European Court of Human Rights ruled against them. It held that Britain’s refusal to link the pensions to inflation, the way it does those of retirees living in the UK and in certain other countries, was “not discriminatory”.
Some of the most popular overseas retirement destinations for British pensioners are on the UK’s frozen-pension list, including New Zealand, South Africa, Canada, Australia, Singapore and Hong Kong.
UK pensioners’ thoughts on moving abroad tested
The survey, which was conducted for the ICBP by Matrix Evidence, questioned a random sample of 490 UK pensioners on their attitudes about moving abroad.
Among its key findings were that almost half (46%) would consider retiring abroad, and that the “destination of choice” for more than one in three (34%) of those surveyed would, ideally, be one of the countries where pensions are currently frozen.
And while 34% said they would move overseas in search of a better standard of living, “nearly two fifths of these (39%) said they would reconsider their decision to move abroad if their pension was frozen”.
The survey also found that nearly one in five British pensioners were not even aware that British state pensions are frozen in certain countries.
More than 1 million expat pensioners
More than a million UK pensioners live abroad, of which, as mentioned, roughly half live in ‘frozen’ countries. It has been estimated that the UK Treasury would have to pay out at least an extra £500m per year if it up-rated those pensions of expats that are currently frozen – some at levels of as little as £6 a week, according to some published reports. The current basic state pension for retirees living in the UK is £95.25 a week.
The response of the UK’s Department of Work and Pensions (DWP) when asked why it does not uprate pensions in the so-called frozen countries is to point to "reciprocal agreements" the UK has with some countries but not with others. In other words, UK pensioners living in France or Germany have their pensions increased because the French and German governments have agreed to boost the pensions of French or German retirees living in the UK. Spokesmen for the expat pensioners challenge this argument, however, noting that it is inconsistently applied and, they argue, has been declared dead by some DWP officials.
The numbers:
• Number of British state pensioners living abroad and receiving their pensions outside the UK in 2009: 1.1 million
• Number of these pensioners living in other European Economic Area member states, and still receiving some of the benefits and services enjoyed by UK-based pensioners: Around 370,000 (one third)
• Number of British pensioners living outside the EU and receiving only the British state pension: 720,000
• Number of these who live in countries where the British pensions are frozen: 543,000
• The net public cost of each pensioner to the UK taxpayer who stays home: Around £4,000 per year
• The forecast net public cost of each pensioner to the UK taxpayer who stays home by 2025/2026: Nearly £5,000
