Page copy protected against web site content infringement by Copyscape



(Contributed by George MILLIE)






Reproduced from the Newsletter of

The British Ex-Services Association



Issue 1, Volume 2, February 2004




Frozen UK Pensions Fact Sheet


Information for the many Australians who have full or part British Pension entitlement.


Australia has 225,000 residents whose UK non-means tested State pensions are frozen; these represent about 47% of the 480,000 UK pensioners worldwide who do not receive regular inflation up-rating to their UK pension. A further 145,000 living in Canada, 35,000 in South Africa, and 34,000 in New Zealand are similarly affected.


As an example, 95-year-old William Hayes now living in Queensland receives a full UK pension of £6.70 per week since about 1973. He should receive £77.45 per week. It is calculated he has been deprived of about £59,000 since his retirement; at today’s rate that is approximately A$140,000. The Australian government in its generosity has made good most of the deficiency. The UK pension arises because everyone who works in the UK, for about 10 years for women and 11 years for men, pay into the National Insurance (NI) fund each week and it is from this fund today’s contributors fund State pensions for today’s pensioners.


Provision for any means-tested pension “top up” by the Australian government is no longer available to British pensioners since March 2001; not until they have lived here for 10 years.


About 420,000 UK expatriate pensioners do, courtesy of bilateral agreements, receive regular inflation adjustments. These fortunate pensioners live in such countries as Turkey, The Philippines, USA, Israel and the EU countries, Barbados, Jamaica, Cyprus, Malta, Mauritius too. It is because of this illogical state of affairs that it is claimed the UK pensioners in Australia, Canada, etc., are being discriminated against on the basis of their country of domicile.


The UK government complains it “cannot afford £400-million per year to up-rate all pensions world-wide, contributions are for the pensioners at home”.


Currently this claim is a fabrication because the NI account has a £30-billion balance which the actuary states “is significantly above the required prudential balance”, this should be about £10-billions, so the fund has excess funds of about £20-billion. (A treasure chest for political purposes prior to the next election?). The £400-million per year represents just 0.7% of the total annual income from National Insurance contributions.


Moreover interest income for the NI fund approximates £1.4-billion per year, in a low interest and dividend environment.


Furthermore from the 30-million present contributors, it would cost about 5 pence per day per contributor to provide that £400-million each year, a very small amount having regards to the current cost of living in the UK.


This alleged discrimination is the subject of an ongoing legal case, which is now at the doors of the House of Lords. It is being run on behalf of a Ladysmith, South Africa based pensioner Annette Carson and funded by pensioners’ contributions collected from around the world by pensioner associations in Canada, South Africa, Australia and New Zealand.


This legal fight by Mrs. Annette Carson could bring significant benefits to Australia. An annual foreign exchange inflow of about £450-million would arise from the additional UK pensions. The full beneficial impact on the Australian exchequer is estimated at £200-million minimum.


Mrs. Carson’s case is soon (early October 2003) to be heard in the House of Lords, to which a petition has been lodged to hear an appeal. The appeal, if granted, will take place mid next year, 2004. Failure by the Lords to accept this petition and hearing has led her lawyers to opine that that would exhaust the UK legal system, which in turn should enable the Carson case to be taken directly to the European Court of Human Rights.


It is in this Strasbourg based Court the British pensioner associations believe that they will receive a favourable outcome. This is because every nation in the EU except the UK pays its expatriate pensioners an inflation up-rating to their pensions each year.


In Australia we have been requested by the Canadian and South African associations to establish a new organization (BPIA) to help fund the ongoing legal costs of Mrs. Carson’s case. Australia is home to the greatest number of British pensioners by far but their contributions to the legal costs to date have been less than 10%.


The Carson case is being brought against the UK government on the basis of a breach of the UK’s Human Rights Act, Articles 1 and 14, especially the latter article on the basis of discrimination by way of domicile.


Jim Tilley, Chairman BPIA