There are more than a million UK pensioners living overseas – with about half of them affected by the pensions freeze. If pensioners have moved to countries with a reciprocal arrangement – such as in the European Union or the United States – then they receive pension increases. But if pensioners have emigrated to countries without any such agreement – such as Australia, Canada and South Africa – their pensions have been frozen at the level of when they moved overseas. For the oldest overseas pensioners, who retired in the early 1970s, the pension can be as low as £6 a week. Those who retired in the early 1980s are left on about £30 a week, and those who retired in the early 1990s get about £50 a week. The current basic state pension is £95.25 a week.
The European Court of Human Rights rejected an appeal from a group of pensioners by an 11 to 6 majority. The group wanted to receive increases in line with inflation. The decision has saved at least £500m a year for the government, which said that its first responsibility was with pensioners living in the UK.
The expatriate pensioners say they have been fighting “tooth and nail” against the UK government in an eight-year court battle. Pensioners who have moved abroad want their UK state pensions to rise in line with inflation each year (significantly, the rate of voluntary National Insurance contributions which provides entitlement to the state pension, does rise with inflation). Inflation-proofing only applies to UK pensioners who live in the European Economic Area or in 15 other countries, but not in some Commonwealth states. You can see a complete list here : http://www.pension-parity-uk.com/pension-rights.htm#Are.
The decision marks the end of the legal road. Judges at the European Court of Human Rights were the latest to declare that National Insurance contributions did not have an “exclusive link” to retirement pensions. ”As non-residents, the applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension,” a statement from the court said. The court said that it was hard to draw any genuine comparison with the position of pensioners living elsewhere.
But Michelle Mitchell, of Age Concern and Help the Aged, said: “This ruling is bad news for half a million pensioners whose only fault is to retire to the ‘wrong’ country in the international ‘postcode lottery’ of pensions up-rating.”