Your British state pension and living in Canada
Are you British but living in Canada. Have you given any thought to what happens to your UK state pension – thought not. Read this very interesting article By Tony Bockman, Chairman, Canadian Alliance of British Pensioners & International Consortium of British Pensioners.
If you ever worked in the UK and you’re either already in Canada or you are planning to immigrate / emigrate, whether you are young or old, please answer the questions below . . . .
Do you know if you are eligible for the State Retirement Pension (SRP) that you helped fund through yours or your spouse’s National Insurance Contributions (NICs) in the UK?
Do you know you can continue to build that pension entitlement, here in Canada, if you’re not yet at retirement age?
Do you know how and when to claim your pension entitlement?
Do you know that the rules have changed if you reach retirement age after 5 April 2010?
Do you know that when you start to receive that pension in Canada, it will be frozen – FOR EVER?
If you are already receiving the SRP, and you have not yet emigrated, do you know it will be frozen the day you depart for Canada?
Are you already receiving a ‘frozen’ pension and know what is being done to try to remedy that?
If you answered ‘NO’ to any of these questions, the Canadian Alliance of British Pensioners (CABP) can empower you!
We can offer advice on how to calculate your eligibility, current or future – indeed, the younger you find out, the greater the chances of accumulating a 100% Pension. And you don’t even have to be British to collect; you just need to meet the requirements regarding residence and contributions to the National Insurance Fund.
The most numerous group of people who “miss out” are those who don’t know that they may be able to continue paying contributions from Canada, retroactively and/or going forward, in order to earn themselves an even larger return – and at a much cheaper cost than paying into an RRSP. This can be lucrative for anyone, however the younger the better.
The frozen pension issue – in a nutshell
Our number one priority is to achieve pension parity for all recipients of the UK State Retirement Pension, wherever they might choose to live in the world during their retirement years. The points below explain the situation to-date.
There are 12 million UK State Retirement Pensioners, all of whom contributed to the UK Pension scheme via compulsory National Insurance Contributions. This is similar to the Canada Pension Plan, the value of each pension reflecting the number of years of contributions paid.
Of the 12 million pensioners, just over one million live outside the UK.
Half of these expatriate pensioners receive the same annual uprating of their pensions as those still living in the UK, while the other half does not – their pensions are frozen simply because of where they have chosen to reside in retirement.
Commonwealth nations and British Overseas Territories are home to 98 per cent of “frozen” pensioners, including 153,000 in Canada (plus 240,000 in Australia, 46,000 in New Zealand and 38,000 in South Africa).
The UK is the only OECD nation which denies parity to all state pensioners regardless of their country of residence.
Financial impact on Canada? Almost one-third of a billion dollars a year, comprised of:
$275 million in foreign pension income withheld from the Canadian economy.
$23 million paid out in federal Guaranteed Income Supplement expenditures to struggling UK pensioners living in Canada.
Cost to the UK government to provide parity to these frozen pensioners?
£470 million this year (2008/09) which is less than one per cent of the NIF expenditure and which the government says it cannot afford because the NIF balance (surplus) is “borrowed” by the government to invest in capital projects like schools and hospitals.
At the end of March 2008, the NIF balance exceeded £46 billion and it is projected to rise to whopping £115 billion by March 2013 (equivalent to over 136 per cent of that year’s estimated payouts).
The Government Actuary’s office predicts that, during 2008/09, the NIF average monthly income will exceed the expenditure by £900 million per month! (adding £10.8 billion to the balance.) Meanwhile, the cost of parity would be less than £40 million per month!
Additional savings to the UK government created by frozen pensioners living abroad? Almost £4 billion this year alone in health and care and other age-related costs which HMG would need to spend if we’d all stayed home.
All of the above is based upon information from UK government documentation
What are we doing about this?
The Canadian Alliance of British Pensioners (CABP) has united pensioner organizations in Australia, South Africa and Canada in a consortium which we now call the International Consortium of British Pensioners (ICBP).
This has enabled 13 pensioners Applicants (eight from Canada, four from Australia and one from South Africa) to bring a human rights discrimination case against the UK government in the European Court of Human Rights (ECHR).
The suit seeks pension parity for all UK pensioners, regardless of where they live. The case has been scrutinized, accepted, prioritized and placed on the fast track by the court due to the advanced age of many of the applicants. Currently, we expect a hearing in 2008 with a judgment anticipated in 2009. Our lead council in the UK handling this case is Timothy Otty QC, a leading human rights lawyer.
In addition, Phil Tunley of Stockwoods LLP provides pro-bono legal advice to us in Canada, a task he has undertaken for many years. He first handled the case when he was a Senior Partner with McCarthy Tétrault and then transferred it with him to Stockwoods when he moved there a couple of years ago. He was responsible for identifying Timothy Otty as our UK counsel and we are forever grateful for the work Phil has undertaken over the years.
On the advice of Counsel, a secondary case has also been filed listing all members of CABP (and the members of each ICBP Partner Organization) as “applicants,” thus ensuring that at least these 40,000 or so individuals will share in the fruits of the decision on the primary suit. This list of “Applicants” is updated with the Court on a quarterly basis, as more and more people become members of CABP and the ICBP Partner Organizations, in an attempt to safeguard their rights.
CABP and the ICBP continue to aggressively lobby both chambers of the UK Parliament in order to eradicate any appetite for launching an appeal when the ECHR finds in favour of our applicants and to extinguish the political will for continuing to impose pension freezing.
CABP gratefully acknowledges the generous support of the Canadian Government which enabled the case to proceed through the UK legal system in order to get to the ECHR and still stays very much in touch with our efforts and progress
How do we fund all of this activity?
I can hear you all asking that question as you read this. It is quite a challenge and we do it all through the generosity of our members, who pay an annual membership fee of $20 (a little more if they are overseas members) and on top of that make voluntary contributions to our Action Fund if they so wish.
Each of the other four Partner Organizations makes donations from its domestic funds to what we now call the Consortium Fund, which is used solely to support the costs of our Court case and our lobbying activities in the UK. So the pensioners who are being discriminated against by the UK government are the ones providing the means to fund the activities.
This Consortium Fund is managed by CABP and is held in Sterling funds as most of our legal and lobbying expenses are incurred in that currency. Phil Tunley approves all UK legal team expenditures and the CABP Treasurer issues a financial report on the Consortium Fund to the Partner Organization every month.
What do you get for your $20 membership fee?
To summarize what’s been said above and in the hope that you are persuaded to join us, here’s what you get for your $20:
A date with the European Court of Human Rights.
A crack team of lawyers fighting for your rights.
The support of the International Consortium of British Pensioners, over 40,000 strong.
Advice on dealing with the Pensions Service at the Department for Work and Pensions.
Four Justice magazines a year to keep you informed.
Please remember, you don’t have to be a pensioner to join CABP. If you are not yet at retirement age but you live in Canada and intend to qualify for a UK State Retirement Pension, that pension will eventually become frozen, unless we do something about it!
If you are already a pensioner living in the UK and you are planning to emigrate to Canada to be close to family loved ones in your declining years, then your state retirement pension will become frozen the day you step on that aircraft or boat, unless we do something about it!
Numbers are important to our cause. The more members we have, the louder our voice becomes and the easier it is to attract the attention we need. And if it is less than 15 years since you left the UK, you still have the right to vote in a UK parliamentary election. We can tell you how to do that and our voice then becomes louder through your participation.
Where to find us
The Canadian Alliance of British Pensioners (CABP) is a not-for-profit organization registered with the federal government. It is run by volunteers with members and active volunteers across Canada. For more information, call our national office toll-free: 1-888-591-3964; in the Toronto area call 416-253-6402; Email info@BritishPensions.com; On-line: www.BritishPensions.com.
At our website you will find links to all of the International Consortium Partner Organizations. These are:
British Pensioners Association of Western Canada (BPAWC)
British Australian Pensioner Association (BAPA)
British Pensions in Australia (BPiA)
South African Alliance of British Pensioners (SAABP).
You will also find a link to the new International Consortium website there but you can go straight to it through the following link: www.pension-parity-uk.com.
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I have to confess I had never even thought about this when I emigrated two years ago. I thank you for pointing this out and will be in touch with Mr Bockmans group for advice.
What beats me is the fact that retirees to the U.S. DO get the increases! Another pact between Maggie and Ronald perhaps?
My wife and I are British ex pats living in Canada and we think it’s a disgrace that all British pensioners aren’t treated equally, we all paid into it when we lived and worked in the UK. Apart from that with the exchange rate my wife and I are about 175 dollars a month worse off than we were previously. What about pensioners living in Spain , Jamaica, etc getting the heating allowance, how stupid is that?? Who can I contact in the UK gov. to complain, as far as I can make out no MP accepts email unless it’s from a costituent. thanks!!