With the compliments of the
British Age Pensioner Alliance
One of our strategies is
to attempt to have the annual Social Security Uprating regulations annulled. Our
target is the regulation which re-imposes the freezing regime every year.
Here is an example:
That an humble Address be presented to Her Majesty, praying
that the Social Security Benefits Up-rating Regulations 2008 (S.I., 2008, No.
667), dated 9th March 2008, a copy of which was laid before this House on 13th
March, be annulled.
There is a lot of
misunderstanding about the effect of an annulment motion. People fear that if
the annulment is carried we will only get uprating from the present level. For
example, a man with a pension of £10 per week would get a rise of only 39 pence,
even though he had contributed all his life.
Here are the reasons why I
think that this fear is groundless.
(The figures here are based on the
2007 Uprating order. Although the figures have changed since then the
pattern and principles are the same)
The 2007 Uprating order, in respect of
basic pension, said for "£84.25" substitute "£87.30".
It does not say "the basic pension shall
be increased by £3.05" nor does it say "the basic pension shall be increased
by 3.6%". it is in fact saying "the basic pension shall be £87.30". (Of
course, people with an incomplete contribution record would get a proportion
Nevertheless we should have a look and
see what the Regulations say.
Regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975
(application of disqualification in respect of up-rating of benefit) shall
apply to any additional benefit payable by virtue of the Up-rating Order.
What are the words of Regulation 5?
Regulation 5(7) – “…a person who…is not
ordinarily resident in Great Britain shall, while absent from Great Britain,
receive benefit at the same rate as previously…the amount appropriate to that
person when he was last ordinarily resident in Great Britain…”
What this reg says is "you won't get the
rate set out in the uprating order, you will only get the rate you got when
last resident." If clause 3 of the annual regulations is annulled, then we
will get the current rate instead of the rate that applied when we were last
resident in Great Britain.
The increase set out in the Uprating
Order is not an increase by so-much, nor by so-much percent. It is a straight
In respect of Graduated Retirement
Benefit the Uprating Order says:
(a) the sum of 10.20 pence shall be
increased by 3.6 per cent.; and
(b) from and including 9th April 2007 the reference in that provision to that
sum shall have effect as a reference to 10.57 pence.
So although it uses 3.6% it translates
that into 10.57 pence. The conversion rate for grb units shall be 10.57 pence.
It does not say that grb pensions shall be increased by 3.6%. So if the
freezing was lifted, all grb units would be converted at 10.57 pence.
Again a straight substitution.
For SERPS it does say increased by 3.6%,
so maybe existing SERPS pensions would be increased only by 3.6%. But that
would create an administrative nightmare for DWP.