Ex-pat pensioners in court over pension freeze

Wednesday, 02 September 2009 10:39

A group of pensioners from Australia, Canada and South Africa are taking the UK government to court over their frozen pensions.

Under current rules, pensioners retiring abroad to some countries see their pensions frozen so they do not increase with inflation.

The pensioners claim, however, they are not being treated fairly as counterparts retiring to an EU country, the US or a number of other nations see their state pension continuing to rise.

Some 525,000 pensioners around the world are affected, according to the Department for Work & Pensioners.

Around 535,000 pensioners abroad receive pensions that do rise with inflation into foreign accounts - although many more may be living abroad but receiving their pensions into UK accounts.

The cost of increasing their pensions that are not indexed is put at £500 million, and could be higher if increases have to be backdated.

The case today will be heard in Strasbourg at the European Court of Human Rights (ECHR).

The case is being led by Annette Carson, who moved to South Africa in 1989. She started in 2002 taking the UK government to court - and after a succession of appeals, the case has now reached the Grand Chamber of the ECHR.

Twelve further pensioners are also involved in the case.

The pensioners argue the decision to freeze their pensions is discriminatory and that some are forced to choose between surrendering a large part of their pension entitlement or living far away from their families.

Andrew Harrop, head of public policy for Age Concern and Help the Aged, said: "It's hugely unfair that pensioners who have made their National Insurance contributions all their lives in the UK are being penalised for retiring abroad and losing out on the uprating of their pension.

"We hope the case today will see an end to this inequality and ensure the government gives every pensioner their fair share, no matter where they decide to retire."

Jim Tilley, chairman of British Pensions in Australia (BPiA), told myfinances.co.uk last month: "To many pensioners, it is a major source of income especially if they have gone to the frozen countries to retire with their families.

"And think too of the Trinidadian who goes home from working on London transport to retire. He does not get the pension indexed but his mate with whom he worked goes home to Barbados or Jamaica and does."

A full verdict could take a further six months.

A spokesperson for the Department of Work and Pensions said the government's priority was helping less well off pensioners in the UK.

He added the ECHR had previously found the case was not a matter of human rights and information on which countries are affected and where pensions are not index-linked was available.

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