WHY WE ARE CAMPAIGNING FOR PARTIAL UPRATING:
There are many ways to end frozen pensions. Traditionally organisations such as the International Consortium of British Pensioners as well as many members of the APPG have campaigned for pension equality. This means that every pensioner should get the pension they are entitled to, regardless of where they live. This is after all the most just solution. Everyone should get the pension they paid for through their National Insurance contributions, and should be uprated in the same way. There is no rational reason why a pensioner who moved to Canada to be with children would have their pension frozen, yet if they moved to the United States would get annual increases.
However, successive governments have refused to act to end the current policy the grounds of cost, fear of legal claims for backpayment and the fact that however strong the moral case, there is no legal obligation on them to do so.
The APPG on Frozen British Pensions recognise that financial times are tough, so we are committed to promoting solutions to the frozen pension policy that are both affordable and deliverable now.
We believe that Partial Uprating offers one such solution.
- Partial Uprating would involves a positive policy decision to introduce annual uprating to all currently frozen pensions going forward, but from their current rate only, rather than first making up frozen pensions to “as UK” rates.
- Partial uprating would benefit all currently frozen pensioners immediately by ending the real terms year-on-year decline of their state pensions.
- It would remove the problem completely for future retirees, removing a significant barrier to pensioner emigration from the UK, including for a significant number ethnic minorities now approaching retirement.
- At an estimated upfront cost of just £37 million – miniscule in government spending terms – Partial Uprating option offers an affordable and expeditious policy alternative that could be implemented in the current financial climate.
- Partial Uprating would actually generate immediate net savings for the Treasury through consequent savings, including those made through increased pensioner emigration (i.e. Lower NHS / social care costs). The Government currently estimates that there is a £3,800 a year saving for each pensioner who moves abroad in retirement.
- There is a clear precedent for the implementation of Partial Uprating. It is the approach that was taken when the UK signed historic reciprocal agreements with countries such as the USA and Barbados.
- There should be no legal risk of back payment claims (as with full uprating) as there is no implied recognition of historic entitlement. Partial Uprating is simply a forward policy change. Again, the precedent would support this.
- There is no need for bilateral agreements to be negotiated to move things forward. As every other country in the OECD has done already, the UK is free to make unilateral changes to meet what are now international norms regarding overseas pensioners. Australia and Canada, for example, already provide uprated state pensions to their citizens living in the UK.
- Partial Uprating would be very straightforward to deliver.