Oliver Letwin commits look at case for Partial Uprating
November 20, 2015 Frozen Pensions 17 Comments
On Friday 20 November, APPG Chair Sir Roger Gale MP, joined delegates from the International Consortium of British Pensioners to discuss frozen pensions with the Rt Hon Oliver Letwin MP, Minister for Government Policy, in Downing Street.
At the meeting, which was also attended by a special adviser to Iain Duncan Smith, Oliver Letwin recognised the merits of the APPG’s partial uprating proposal and agreed to commission research on the financial case for reform.
The APPG has argued that partial uprating could be cost neutral reform that given the likely savings to government expenditure made as a result of increased pensioner emigration should full pensions be available in currently frozen countries.
If through thorough examination of our proposal the government agrees, then it is thought that partial uprating would then be relatively easy to enact, even in an age of financial cut backs and spending restraint.
The APPG’s financial case can be summarised as follows:
- There are currently 550,000 frozen British pensioners around the world.
- The annual cost of the current frozen pension payments made to these individuals is £1,200,000,000.
- The cost to include currently frozen pensioners in annual uprating at 2.5% would be £30,000,000. This is equivalent to 0.03% of the total state pension spending.
- The government has accepted that there is an average £3,800 net saving per pensioner that moves overseas.
- It would therefore require under 8,000 more people to retire overseas in a year to cover the cost of partial uprating.
- Frozen pensions are known to currently deter emigration to frozen countries. A change of policy would remove this barrier and generate increased pensioner emigration.
The APPG welcome’s Oliver Letwin’s interest in our proposal, his offer to have our figures confirmed by the government and his commitment to commission government research to examine the likely dynamic effect of reform.