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Also see 'Beating the freeze back in Britain'  &  The Monday Essay  by Virginia Blackburn
 

'We shouldn't still be fighting . . .'
By Ava Hubble
(Filed: 10/08/2004)
From the Weekly Telegraph

Arthur Holley was born 92 years ago in East Greenwich, London, and began his working life at Britain's Oxo factory in 1928.

In 1939, when the Second World War was threatening, he was recruited to the London Fire Brigade and was stationed at the Southwark sub-branch, near London Bridge.

During the war, a wing of the station was hit by a flying bomb. Holley escaped injury because he was out on duty at the time, helping to cope with another emergency. His station was hit again when it was operating out of temporary headquarters in London's Lilian Bayliss School. Once again, Holley was out fighting another fire.

"I was lucky," he says. "We got back to find the place in shreds. We often wouldn't get home for days."

He particularly remembered the docklands fires. "I hope I never see anything like that again," he said.

He was decorated for his life-saving rescue work at the Surrey Commercial Docks on Sept 7, 1940. He later received the Defence Medal, the London Fire Brigade Council Medal and the Queen's Long Service Medal.

When he left the brigade in the mid-1960s, he began a 10-year-stint as a fire officer at the House of Commons. He says that if he had known then what he knows now, he would have taken every opportunity to waylay politicians about Britain's frozen pensions policy.

Because of that policy Mr Holley's pension has been frozen at £38.30 a week since 1985, when he and his wife, Pat, emigrated to Australia. Mrs Holley, 87, receives a partial frozen pension of about £20 a week. The current full British pension is £79.60 a week.

"We were cut off dead because we retired to Australia," Mr Holley protested.

The frozen policy also affects expatriates who retire to 47 other Commonwealth and former Commonwealth countries. It does not, however, affect Britons who retire to most non-Commonwealth nations. They receive the same regular cost of living increases as UK-based pensioners.

Mr Holley is a member of the British Australian Pensioners Association (BAPA), which points out that while most parliamentarians now admit that the policy is discriminatory, Whitehall continues to argue that Britain can't afford to change it. That idea is fiercely challenged by BAPA's actuary, James Nelson, who argues that it was recently officially announced that the National Insurance Fund had a surplus of about £30 billion.

The annual cost of granting parity to all of Briton's half million frozen pensioners is estimated at a comparatively small £400 million. Those expatriates include former servicemen and women. "They've done their fighting. They shouldn't have to fight for their pensions," Mr Holley complained.

He and his wife married in June 1940. They had no plans to leave the UK when he retired in the 1970s. But then their son and two daughters moved to Australia.

"We went to see them in 1983," Mr Holley reported. "That's when we decided to emigrate, but we didn't think it would take us two years." They had trouble selling their house in Kent. "People kept pulling out at the last minute," he explained. "It happened three or four times. We were worried that we would have to renew our documents.

"We thought we'd have to go through all the health and security checks again." The couple now have a house in Balwyn, near Melbourne, where their son has settled.

They are hopeful that the South Africa-based frozen pensioner Annette Carson, 64, wins her House of Lords appeal early next year.

A decision in her favour could lead to the abolition of the frozen pensions policy and a more carefree life for expat retirees. Yet victory, even if it comes, will come too late for some, including many war veterans who campaigned for years against the policy. "There's not many of us left," Mr Holley said.

The Monday Essay  by Virginia Blackburn
Published in the UK Express

What an utterly shabby people we are when it comes to the treatment of our old-age pensioners.  A few weeks ago I wrote about the disgraceful way the elderly are treated in Britain and, since then, courtesy of the e-mails that have come in as a response, have learnt that there are some pensioners who are treated worse still.

They are a large number of those who have chosen to live abroad.  Despite paying tax and National Insurance throughout their working lives, nearly half a million British expatriates had their pensions frozen the year they emigrated, a situation that has never been tackled by the Government.

This is a betrayal of its moral obligations.  These are people who contributed to the life and health of this country: now, in old age, we are abandoning them.

In essence, the situation is this.  There are about 11 million British pensioners living in this country and abroad, and of those who choose to emigrate, about 390,000 live in countries where, like their counterparts here, they receive an increase in the British state pension every year.

A further 460,000, however, 98 per cent of whom live in the Commonwealth, do not.  That is because there are some countries, including Canada, Australia, New Zealand and South Africa,  which are “frozen” – in other words no increase in pension payment is ever made.

This is quite against the spirit of what was originally intended: in 1929, pension payments were extended to all those resident in “His Majesty’s Dominions.”  These days, 48 out of the 53 Commonwealth countries have been frozen, and some bizarre anomalies thrown up.

Someone who lives on the French side of the Caribbean island of St Martin will receive an indexed pension, whereas their counterpart on the Dutch side will have their payments frozen.

‘A lady in Canada lost £40,000’

More ludicrous still is the fact that a British pensioner resident in France or Spain will receive an increase every year – but a British pensioner in between the two of them, in Andorra, will not.

The reason for this is a complex one, and is usually explained by the fact that frozen countries do not have reciprocal social services arrangements with Britain.  But the fact remains that the Government of this country could change the law to extend payments to those living abroad any time it wanted to.

The will, however, is not there.  Various MPs on both sides of the House, including the Tory Winston Churchill and Lord Morris of Manchester, the former Labour pensions minister, have raised the issue but a change in the law has never been made.  And this has resulted in cases of real hardship.

The Canadian Alliance of British Pensioners, which is campaigning for a change in the law, cites the case of a woman who retired in 1974 at 60 and emigrated to Canada to be near her children:  25 years later, she had lost an estimated £40,000 through pension payments being frozen.  Indeed, she would have received just £10 a week, amounting to a total over 25 years of £14,020, against the figure of approximately £53,812 she would have received had payments not been frozen.  To deprive an old lady of that amount of money is criminal, in moral terms if not in the law.

This is a situation entirely lacking in natural justice and even common sense.  James Nelson, a fellow of the Faculty of Actuaries, wrote a piece about the moral dimension of pension freezing for the British Australian Pensioner Association: he pointed out that if twins emigrated to Australia after retirement age, one 10 years after the other, then the second to arrive would have a 38 per cent higher pension than the first, and that despite the fact that the two had made identical tax and National Insurance contributions in the UK.  But, of course, there is little political will to change the status quo, because the people affected, while British citizens, do not live in this country and are thus not here to protest.

One exception is Annette Carson, a 63 year-old Briton who paid taxes for 40 years until moving to South Africa on retirement, at which point she found her pension was frozen.

She went to court and, although being defeated twice to date, next year her case, namely that she should have an indexed pension, will come before the House of Lords.

If she wins, that will open the floodgates for claims to follow.  But she should not have to go to the bother and expense of bringing her case to court: her situation is a clear one.  She should be treated the same as someone in her position who never went abroad.

We have a moral obligation to look after these pensioners and it is a national disgrace that their plight is largely ignored.  Nor would it cost a huge amount in real terms to amend the situation: while it is estimated that the total cost of backdating payments would be £3 billion, none of the pressure groups involved are asking for that.

‘No one is asking for backdated payment’

They are only asking for increased payments from this day forth, an amount that would take only £300 million, or less than three-quarters of one per cent of the total UK pensions budget. The UK Government has said that it can’t afford to treat all pensioners equally, but put that against the £7 billion this country loses every year through welfare fraud, and you see the relatively minor amount it would take to right the wrong.

There will be those who say that by leaving this country, those pensioners have forsaken the right to be looked after by the State.  We cannot tell why many chose to do so: perhaps they wanted to be near their children.  Perhaps, not realising the effect of a frozen pension, they thought they might enjoy a cheaper standard of living abroad.

But their motive for emigrating is irrelevant.  The fact is that if someone pays their taxes for 40 years in the expectation that they will one day receive an indexed State pension, then that is exactly what they should get, wherever they choose to live.

As it is, the Government treats them even more badly than it does the pensioners resident in this country, for the simple reason that it can.

The rest of us had better hope that, by the time we reach old age, especially if we want to join our children abroad, the Department of Work and Pensions has had a change of heart.

Beating the freeze back in Britain
By Ava Hubble
(Filed: 04/10/2004)
From the Weekly Telegraph

Retired National Health Service pharmacist, Len Goldstein, 85, and his radiographer wife, Heather, 67, seem to be living the life of Riley. They spend nine months of the year in Buderim. It's a sub-tropical paradise about 60 miles from Brisbane and close to some of Queensland's most beautiful Pacific Ocean beaches. Heather grows star fruit, passion fruit, mangoes and many other exotic fruits with "relative ease" in their garden.

The couple generally return to the UK in May each year to spend three months at their pied-a-terre in Arundel, Sussex. "We like to go home to see the children, plus new additions to the family," explains Heather. "Ours is a second marriage, for both of us. We have five children between us, none of them mutual."

The Goldsteins emigrated in 1989 to join Heather's parents who had settled in Queensland for health reasons. Her father has since died. Her mother, like the Goldsteins themselves, is now among Britain's 500,000 expatriate frozen pensioners. So how are Len and Heather able to maintain their enviable lifestyle?

They explain that they also receive supplementary NHS pensions which are regularly uprated in line with cost-of-living rises. Len currently receives an NHS pension of around £170 per week. His National Insurance Scheme aged pension, however, has been frozen since his emigration at the 1989 UK rate of around £43 per week.

Heather, 18 years his junior, receives a partial NIS frozen aged pension of £40 per week, plus a partial NHS pension of around £40. She points out that although she was employed by the NHS for over 17 years, they were not consecutive years. Consequently her NHS pension was calculated on her maximum period of consecutive service: 7.6 years. "I was in and out of the NHS because my first husband died when I was 33, leaving me with three small children," she explains.

Although the Goldsteins are the first to concede that they are not on the breadline, Heather confesses that like Mrs Bennet in Jane Austen's Pride and Prejudice, she finds herself constantly fretting about the future. "We'll be alright as long as we keep Len alive," she says - to the wry amusement of her husband.

Heather stresses, though, that they manage to go home each year only because of "very careful budgeting". She says she is relentless in pursuit of no-fee credit card offers, generous airline loyalty offers and supermarket specials. "Fortunately, we are both alcohol intolerant," she jokes. "We generally make do with the Queensland ginger beer which is very good. We lace it with tonic water."

She also points to the importance of their UK pied-a-terre. "Our Arundel flat is minuscule, but we can go there without putting anyone out," she explains. "Getting it was the luckiest thing in our lives.

"We bought it quite a few years ago from a 92-year-old man. He and his ladyfriend, who lived in the same retirement block, enjoyed visiting each other. But they worried about scandalising their neighbours. So they moved in together in a nearby village. He let us have his flat for less than he paid for it."

Heather also notes that their trips home are made more affordable because their NIS pensions are "defrosted" for the duration of their stay. Whenever frozen pensioners go home, even for only a couple of weeks, they are entitled to claim the full weekly UK pension (currently £79.60), or, in the case of partial pensioners like Heather herself, the pro-rata equivalent.

"It can make a huge difference," she stresses. "The increase for the two of us, over a three-month period, adds up to about £800. That covers the cost of one return economy air fare." But she advises fellow frozen pensioners that it is not possible to apply for the uprating in advance and that, in her experience, it is not paid until after departing the UK.

What you have to do, she explains, is ring the Department of Work and Pensions as soon as you arrive. She warns that you will probably be answered by a recorded voice, which will ask you to briefly explain the reason for your call and to leave a contact number for reply.

Heather recommends that you comply and then "head straight for the nearest post office" to follow up your application in writing. "Be persistent," she urges. "Keep in touch with the DWP until you are satisfied your claim is being processed."

Heather recalled the long battle she and her husband had to secure their uprating after their visit home last year. "The DWP insisted there was no record of either our phone call or our follow-up letter," she reports. "We were told that because we had not immediately notified them of our arrival in the UK, we were not entitled to the uplift. Yet we had barely unpacked before we got a letter from our bank, asking if we were still entitled to a tax-exempt account, since it appeared we were again operating the account in the UK."

The Goldsteins are members of the British Australian Pensioners Association, one of many organisations campaigning for State pension parity for all expatriates who contributed to Britain's mandatory National Insurance fund.

British retirees in most EU and NATO countries are not affected by the frozen pensions policy. It penalises only those living in most Commonwealth and former Commonwealth nations.

Heather, however, complains that expatriates, and particularly frozen pensioners, are being increasingly discriminated against.

"During the war my husband spent six years in the Army," she points out. "He served in West Africa. He later spent 33 years working for the NHS. During all that time he contributed to two pension funds. He worked countless hours of unpaid overtime in the NHS. We both did.

"Now, when we go home, because of the new regulations affecting expats, we are not even allowed to consult an NHS doctor without charge."

She noted that the British government is currently penalising the insurance industry for mis-selling pensions. "But that's exactly what the government has done," she protested. "We were told that if we paid into the NIS, we would receive an index-linked pension.

"We were not told there would be no uprating if we retired to certain parts of the world. In any case, who has a crystal ball? I had no idea, when I was working, that I would find myself living in retirement in Queensland."

Heather says that had she known, she would have "begged and borrowed" to try to keep up her contributions to the fully-indexed NHS scheme.

Yet she says it's the associated "petty meanesses" of the frozen pensions policy that she often finds most alienating and provoking. "My husband is entitled to the octogenarians supplement, but only when he is resident in the UK," she adds.

"We are not allowed the pensioners' heating allowance, even though we have to pay rates on our Arundel flat and arrange for it to be heated during the winter in case the pipes burst. We are not allowed the pensioners' Christmas bonus."

She recalled that her parents were ordered to refund theirs. "It was paid to them in the November before they left for Australia and demanded back a few weeks later, virtually on Christmas Eve, as soon as the DWP caught up with the paperwork and realised they had emigrated."

If Heather finds herself widowed again, she says she could not manage alone in Australia. "I would have to return to the UK where I could claim free prescription medicines and other benefits," she explains. "I hate the idea of having to apply for a supplementary Australian pension. It would not be fair to the Australians."

Why, she wonders, does Britain persist with its frozen pensions policy. "It makes no financial sense," she argues. "Imagine the drain on the health budget if we are all forced to go home for good."

Meantime, the policy costs the Australian taxpayer in excess of £50 million annually in benefits to 160,00 expatriates who can no longer survive on their UK aged pensions, some of which have not been uprated for 20 years or more.