British Expats Take Pension Inequality to European Court of Human Rights

We have regularly highlighted the fact that British retirees who choose to retire abroad and escape the horrendous weather in the UK are discriminated against by the British government depending on which country they decide to move to.

The pensioners negatively discriminated against are those who have made National Insurance Contributions throughout their working life, who choose to move abroad to certain nations such as Australia and South Africa and who then draw down their British State Pension abroad.  These individuals, living in a handful of specific nations only, have their British State Pension frozen on the day they retire or the day they leave the UK’s shores to live abroad.

The government has a confused policy in place that only freezes pensions for those Brits living in a handful of countries – so, clearly the British government is seeking to restrict an individual’s freedom of choice when it comes to where they retire.  Now, in the latest move by a group of affected retirees, British expats take their pension inequality fight to the European Court of Human Rights – and we are supporting them all the way.

The situation as it stands is very simple.  In the UK, as a working adult and a resident taxpayer you make social contributions along with your regular tax payments.  These are called National Insurance Contributions, (or NICs).  The money you pay in is immediately used up by the government to pay out for the likes of the NHS and for people already claiming the State Pension.  But your contributions are supposed to guarantee you the right to a State Pension when you retire.  How much you are entitled to depends on how many years you worked and made your NICs.

Women who take time out to take care for children for example can make voluntary top up payments to make sure they are entitled to a pension when they retire, and some expatriates such as Annette Carson, one of the British expat retirees taking her case to the ECHR this week, can continue to make NICs from abroad.

As long as you pay in to the state system in this way you are entitled to receive, in the form of a State Pension, when you retire…in theory at least.

We say ‘in theory’ because the British government has a bizarre policy in place where, depending on where you retire to, you may not be entitled to the full state pension after all!  If you decide to move abroad in retirement then depending on where you live, you may not get your state pension index linked.  If you move to live in America then your state pension is index linked.  If you move to live in Australia it’s not.  If you move to live in Spain it is, if you move to live in South Africa it’s not.  So as you can see, it’s a very confusing and discriminatory policy which is why a group of affected expatriate retirees are taking the British Government to court over the issue.

The trouble is, Britain’s bankrupt – it hasn’t admitted it yet and will try and deflect attention away from just how fiscally screwed it is for as long as it can – but it is going to fight tooth and nail to prevent having to index link some 500,000 pensioners’ entitlement as it could cost them millions.  But how oh how can such a ridiculous and randomly discriminatory policy exist? 

Whilst we would call it unfair and fight against it tooth and nail, we could just about understand it if the UK government froze all pensions for overseas retirees.  But to just take a handful of countries almost at random and freeze pension entitlements for Britons retired therein is – to put it very bluntly and oh so simply – bloody unfair.

Here are a couple of ‘lovely’ quotations from the highly intelligent policymakers on this issue, just for your amusement and to show you how crazy the situation is: -

In speaking about affected expat Annette Carson: “She was under no obligation to move to South Africa.”
And in defending the government’s stance on only targeting those in certain nations: “It’s not just the money, it’s the principle.  These people made a conscious choice to go abroad, and a conscious choice to go to a particular country.”

We don’t hold out any hope for the expats who have taken their case to the European Court of Human Rights (ECHR)- although as anyone with just half a brain cell, (such as a politician for example – tee hee), can see, they have a case that it is not possible to lose!  But lose they probably will as pressure is placed upon the ECHR, and the lofty refrain will probably be some form of deflection tactic along the lines of the state system in the UK is up to the British government to manage, and their priority must be the residents of Great Britain.  An understandable, (although not acceptable), argument if all Britons retired abroad had their pension frozen, but wholly unacceptable as the only ones affected are those who live in a small handful of countries abroad.  Mental I’m sure you’ll agree.