Thousands of expatriate Britons now await a decision by European human rights judges in Strasbourg that will affect how much state pension they are to receive in years to come, following a key hearing on Wednesday.
The decision is not expected for some time, possibly months, according to a spokeswoman for the European Court of Human Rights.
At issue is whether an estimated 500,000-plus expatriates living in Australia, South Africa, Hong Kong and Canada – who receive UK pensions after having paid National Insurance contributions while still living in Britain – are entitled to receive the same annual inflation-linked increases that are given to those still resident in the UK, as well as to British expats living in such other countries as the US and European states.
Lengthy battle
The case now before the 17 Strasbourg judges dates back years and has its origins in a suit brought by Annette Carson, a British national who lives in South Africa. Carson’s claim got as far as the House of Lords before it was dismissed on appeal in May 2005.
Later that year, she and 12 other expat pensioners moved on to the European Court of Human Rights (ECHR), where earlier this year their application was referred to the final appellate stage, the Grand Chamber, after a lower ECHR court rejected it last November by 6-to-1.
The UK has argued that the decision whether or not to "up-rate" UK pensions paid to expats has to do with reciprocal agreements it has with the individual countries in which these expats live. Britain has such arrangements with its 26 fellow EU countries as well as with the US, Iceland, Liechtenstein, Norway, Switzerland and Turkey.
This means that UK pensioners living in the US or France have their pensions increased in line with the increases enjoyed by pensioners back home in Britain, because, UK officials say, the US and French governments have agreed to boost the pensions of American or French retirees living in the UK.
In May, a source familiar with the details of Carson’s case told International Adviser that if her pension been up-rated in line with inflation – as it would have been if she had remained in the UK or moved to Europe instead like that of her UK fellow pensioners – it would now stand at £82.05 a week rather than its current £67.50.
‘Discrimination’
The European Court of Human Rights case hinges on whether the British government is seen to be discriminating against those pensioners whose pensions it “freezes”, by not freezing those of others.
The 13 pensioners are supported in their cause by an organisation known as the International Consortium of British Pensioners (ICBP).
Alliance & Leicester International study
In May, Alliance & Leicester International reported that seven of the 12 most popular overseas retirement destinations among British retires are on the UK’s frozen-pension list: New Zealand, South Africa, Dubai, Canada, Australia, Singapore and Hong Kong.
A website that identifies itself as representing the interests of British expats whose pensions are frozen, www.Pension-Parity-UK.com, says that approximately half of the one million UK expatriate pensioners worldwide have their pensions frozen, even though 98% of them live in Commonwealth nations and British Overseas Territories.
The UK government saves £4bn annually “due to [these] frozen pensioners being ineligible for various non-pension age-related expenditures awarded to pensioners remaining resident in the UK”, the website notes, while the cost of indexing those now-frozen pensions in 2009 would be around £480m.
In an interview with International Adviser earlier this year, a spokesman for the Canadian Alliance of British Pensioners noted that the frozen pensions had hit particularly hard those Britons over the age of 65 who have gone to join their children abroad, unaware that in doing so "they would become a burden on their children" as their pensions failed to keep up with the rising cost of living.
