I was surprised to learn recently that more than half a million British pensioners living overseas are facing tough times as they get older as the government has frozen their State pensions.
The policy means almost half of all pensioners living overseas do not receive increases in their pension payments and their pension remains at the same level for their entire lives.
It’s an uneven policy as British pensioners in some countries get the increased payments whereas others are frozen. More than 95 per cent of those affected live in Commonwealth countries, most in Australia, Canada, South Africa and New Zealand, but also India, Pakistan, Bangladesh, many Caribbean islands and all African countries, except Mauritius where pensions are indexed.
The system seems very unfair. A pensioner aged 90 living on a frozen pension would receive £41.25 per week, whereas a pensioner retiring today would get £155 per week. The different amounts are based on where they live and nothing else.
Many pensioners have paid into the system their entire lives and expected to be supported through retirement. The policy deprives many of them from choosing where they want to spend their retirement, often with their family, as it could be financially illogical to move abroad. Plus, as they get older they will need medical support.
I have no intention of retiring and won’t claim any State pension. But I have heard from some of those affected how hard it is to keep living on the same amount of money as the world keeps getting more and more expensive.
The International Consortium of British Pensioners – led by Sheila Telford - is working to get the government to reconsider their policy. They have the support of a number of MPs and are hoping a solution can be found to alleviate the hardship faced by many. The cost to solve the problem would be just 0.7 per cent of the pensions budget in 2017. You can read about their campaign here.