A Solution


Members of the APPG believe that all who are entitled to receive the state pension, according to the National Insurance contributions they have made during their working lives, should get their full and up-rated pension in retirement, wherever they choose to live.  We see no rational reason why a pensioner who moved to Canada to be with their children should have their pension frozen, yet if they moved to the United States would get annual increases.

Traditionally frozen pension campaign organisations such as the International Consortium of British Pensioners, as well as many members of the APPG, have campaigned for pension equality. This would mean bringing all currently frozen pensions up to their full – as UK – entitlement and up-rating universally going forward. This is, after all, the most just solution, with maximum impact for all affected. Everyone should get the pension they paid for through their National Insurance contributions, and should be up-rated in the same way.

However, as a group, the APPG recognise that successive governments have refused to act to end frozen pensions in this way, citing grounds of cost, fear of legal claims for back-payment, and the fact that, however strong the moral case, there is no legal obligation on them to do so. We also recognise that the current fiscal climate is a tough one to be making spending demands on that scale. We have therefore concluded that to be successful in our objective to end frozen pensions in the long term, we need to offer affordable and deliverable policy options that can gather broad cross-party support now.

As a group we have therefore put our recent energies into campaigning to annul the Social Security Benefit Up-Rating Regulations. This is the annual measure brought forward by the government to exclude the 550,000 frozen pensioners from the Social Security Benefits Up-Rating Order, which applies the general (triple lock) up-rating each year. We believe that this is the is the most realistic progress that can be made on this issue in the current political and fiscal climate, though we also appreciate that it would be a second best outcome for many currently affected pensioners, and remain open to alternative suggestions in the course of our regular discussions.

Policy Impact:

  • Annulling the Up-rating Regulations would introduce annual up-rating to all currently frozen pensions going forward, but from their current rate only, rather than first making up frozen pensions to “as UK” rates.
  • Annulling the Up-rating Regulations would benefit all currently frozen pensioners immediately by ending the real terms year-on-year decline of their state pensions.
  • Annulling the Up-rating Regulations would remove the frozen pension 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 – minuscule in government spending terms – Annulling the Up-rating Regulations option offers an affordable and expeditious policy alternative that could be implemented in the current financial climate.
  • Annulling the Up-rating Regulations 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. Up-rating going forward 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 there is no implied recognition of historic entitlement. Annulling the Up-rating Regulations 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 up-rated state pensions to their citizens living in the UK.
  • Annulling the Up-rating Regulations would be very straightforward to deliver. Requiring a simple vote of parliament. Securing this vote is actually the harder task, as the measure is subject to negative parliamentary procedure.