It’s entirely possible that you need no further excuse to consider retiring abroad – after all, a number of recent surveys in the UK have clearly indicated that the majority of Britons would seemingly love to retire overseas. Reasons cited include the weather, the lifestyle and the cost of living…and I am sure you have your own list of reasons for considering the option already.
However, if you were looking for just one final incentive to relocate, did you know that if you retire abroad you can save the government a small fortune? Okay – so that might actually be an incentive not to move abroad – but it’s interesting isn’t it, that the government won’t uprate the frozen pensions of many who live overseas even though they can comfortably afford to do so? Because for every British citizen who retires overseas the government saves a small fortune in terms of social benefits and NHS care.
The fact that for every retiree who chooses to relocate the government saves £4,000 was identified by research undertaken to determine whether the government really can afford to uprate the frozen pensions of those who live in the likes of Australia and South Africa. The findings were fascinating – because if the government did commit to uprating, they’d see the back of more pensioners and actually be better off at the end of the day…and yet they still refuse to consider this option.
Those who retire to the likes of Australia, Canada and South Africa have their state pensions frozen the moment they leave the UK. Those who retire to the likes of France, Cyprus or America do not. This is a fact that puts off more and more retirees every single year.
So, despite the fact that the majority of Britons want to retire abroad, many are put off from making the move because they will be worse off financially if they do so.
The official figures are as follows: -
According to the report ‘Pension parity: can the UK Government afford it?’ a representative sample of British pensioners were surveyed and it was determined that 46% would like to retire abroad. However, out of those surveyed 34% wanted to retire abroad to countries affected by the state pension freeze. Directly because of the freeze, 39% of pensioners stated that they have been deterred from actually moving.
So, the government, in not agreeing to unfreeze and uprate the state pensions in the nations affected are preventing thousands of retirees from moving abroad each year – yet for every pensioner they can wave goodbye to they can save on average £4,000…
The clever people at the International Consortium of British Pensioners decided to do the maths for the government and see whether uprating would cost the government as much as politicians claim it will. Lo and behold it turns out that actually, if the government were to unfreeze and uprate pensions going forward they would actually save more money than they are saving by leaving them frozen!
How is this possible? Because more people would retire abroad, and the government would save more multiples of £4,000 as a result, and this would add up to a greater saving than the one they claim they are making by not uprating!
According to John Markham, director of UK Parliamentary affairs for the International Consortium of British Pensioners: “The Government has said that it cannot afford to uprate all pensions, but our report shows that by doing so it would still pocket a massive saving.
“Every person who retires abroad saves the Government around £4,000 per year, and we estimate that around 7,000 people retire to countries where pensions are frozen every year. This number would clearly increase if the freeze was lifted [as identified from their report’s findings as detailed above]. The report suggests that if all pensions were uprated, the Government could save £31 billion over the next 15 years, compared with only £33 billion if they weren’t uprated.
“Essentially, these are vast numbers, which I don’t think the Government understands or recognises. It’s not simply the case that these people, many of whom made national insurance contributions their whole working life, deserve to have their pensions unfrozen: it makes economic sense too.”
The current coalition government in the UK is all about headline spending cuts – therefore isn’t it time they actually heard what the International Consortium of British Pensioners is telling them rather than failing to grasp any of the elements of their argument?
We support the fight of British pensioners living abroad to have their state pensions unfrozen and uprated.