Home alone and trapped in the UK

Thousands of older people will remain trapped in the UK, separated from their families abroad, after a recent ruling by the High Court in London. People like Nancy Shorrock from Lancashire

"I have worked all my life, brought up two children on my own without any help from the State and paid full contributions towards a UK State Pension. My daughter Helen got married and went to live in Australia five years ago. I now have a grandson, James, who’s two and a half, and whenever I go to see them my daughter asks why I don’t go to live there. But I can’t because the British Government will freeze my State Pension at the amount it is when I leave - they will not pay the annual increments which I would get if I remained in the UK. Each year it would be worth less and I would not want to have to rely in future on my daughter. I just feel cheated. I’ve paid tax all my life, never claimed any help. Pensioners in some countries abroad are paid the increments. I am disgusted and angry about this discrimination."

Nancy is one of many people who feel they just cannot afford to leave the UK to live with their family abroad because of the strange way the UK retirement pension is paid to ex-patriates. In the UK, the state pension is raised each April in line with prices. But people who go to live abroad face a lottery. In 40 countries, including all European Union countries and the United States of America (see Box) the pension is raised each year as it is in the UK. But in the rest of the world a UK pension is frozen at the level when it is first paid abroad. The result is that some elderly people who retired abroad in the 1970s are still paid a pension of less than £10 a week even though they paid full National Insurance contributions in the UK all their working lives.

There is no rhyme or reason behind the list of countries where pensions are uprated and where they are not. They are increased in the USA but not in neighbouring Canada; in Barbados but not Trinidad. The Phillipines is on the list, Indonesia next door is not. Even in Europe, pensions are uprated in France, but not in its tiny neighbours Andorra and Monaco. Only five out of 54 Commonwealth countries are included on the list as are just two of the UK’s 13 overseas territories.

Even the Government admits it makes no sense. In November 2000 Jeff (now Lord) Rooker, who was then Pensions Minister, told the House of Commons "I am not prepared to defend the logic of the present situation. It is illogical. There is no consistent pattern.…This is a historical issue and has existed for years." In Opposition Labour supported the campaign for change. Indeed many MPs who later became Cabinet Ministers signed motions calling for change. But in Government, Labour has adopted the policy of its predecessors and refused to change the law to uprate the retirement pension in all foreign countries. The cost of doing so is now put at around £400 million a year – and that would just uprate the existing pensions each April, not raise them all to the current levels.

Although frozen pensioners are found all over the world, 90 per cent of them live in just four countries – Australia, Canada, New Zealand, and South Africa. Strong diplomatic pressure from these countries has failed to bring any change. In March 2001 Australia even went so far as to pull out of a social security agreement with the UK. As a result, anyone emigrating to Australia from that date will not get any entitlement to Australian benefits or pensions until they have lived there for ten years.

Angered and concerned by this lack of progress, the small South African Association of British Pensioners decided to challenge the policy in the courts. They found a volunteer in Annette Carson, a writer who left London for a new job in Cape Town in 1989 and stayed. She carried on paying voluntary National Insurance contributions to the UK but she was never told by the Department of Social Security that she would only get a frozen pension for them.

She reached 60 in September 2000 and in April 2001 did not get the £5 rise in her pension that was paid in the UK. She launched a legal action under the Human Rights Act which incorporates the European Convention on Human Rights into English and Scottish Law. Annette claimed two breaches of the Convention. Contrary to Article 1 of Protocol 1 it was depriving her of her lawful property – the full state retirement pension to which she had contributed all her working life. And she claimed that she was being subject to unlawful discrimination compared with people in the UK and the 40 other uprating countries, contrary to Article 14.

But in a lengthy judgement on May 22, Mr Justice Stanley Burnton dismissed the case on all grounds. He said that Annette had never had a right to an uprated pension so she could not have been deprived of that right. There was no discrimination because no fair comparison could be made between people in different countries where the cost of living and the exchange rate of the pound varied considerable. Finally he held that the Government was able to decide how pensions were uprated, and the courts should not interfere with that right. He concluded "the remedy of the expatriate United Kingdom pensioners who do not receive uprated pensions is political not judicial. The decision to ay them uprated pensions must be made by Parliament."

Annette was devastated "You can imagine my reaction, very very disappointed indeed. I was also disappointed that the judge said it was not a legal issue but a political issue. It is an abrogation of what we hoped he would rule on, especially as he immediately indicated in open court that he is happy for us to go to appeal."

And Annette was "absolutely aghast." when Government lawyers demanded that she should bear the costs of both sides. Although it is normal in English courts for the loser to pay, the Department for Work and Pensions has often paid its own costs in important test cases. But the judge ruled Annette must pay and, if the Government enforces the debt, Annette could now lose her home in the countryside near Cape Town. She at least has a stay of execution on that matter – the judge also gave her leave to appeal against the costs order.

The outcome was a severe blow to half a million pensioners already living around the world and to perhaps thousands who feel trapped in the UK. June Borsberry, 78, lives in Gloucestershire. She would dearly like to spend the rest of her life in Canada with her son Larry – her only child – and closer to her three, now almost grown-up, grandchildren. But she is afraid.

"I have a another pension but it is smaller than the state pension and the thought that my main income is going to diminish is a real scare. I want to live near to my family, otherwise at some point I will have to go into sheltered accommodation of such like and be there by myself. But if my main income, which is after all barely £80 a week now, is frozen how will I manage? I don’t plead poverty but it will go down in value as the years pass. So I cannot afford to be near my family who could keep an eye on me. Here I am alone."

Her future and that of so many people now depends on whether Annette can find the money to take an appeal. Her lawyer Graham Chrystie of City solicitors Thomas Eggar told Saga Magazine "My client is naturally very disappointed by the outcome and is appalled and astounded by the attitude taken by the DWP. There are no big sponsors here, no corporations funding her case. Clearly the judge had no hesitation in granting an appeal and seems to feel it right that the matter should go to a higher authority. We now have to give that careful consideration and there are several grounds for that appeal but costs are an issue. Maybe a white knight will come forward to assist half a million pensioners worldwide."

UK retirement pensions are frozen in all countries outside the UK except the following 40, where they are uprated each April as they are in the UK

European Union (all)
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden

European Economic Area (all)
Iceland, Norway, Liechtenstein

Commonwealth (5 out of 54)
Barbados, Cyprus, Jamaica, Malta, Mauritius

British Overseas Territories (2 out of 13)
Bermuda, Gibraltar (In the Falkland Islands the local legislative Council tops up frozen UK pensions to the level that would have been paid in the UK.)

Crown Dependencies (all 5)
Alderney, Guernsey, Isle of Man, Jersey, Sark

Former Yugoslavia (all 6)
Bosnia Herzegovina, Croatia, Kosovo, Macedonia, Slovenia, Federal Republic of Yugoslavia (Serbia).

Others (5 out of around 100)
Israel, Philippines, Switzerland, Turkey, United States of America

South African Alliance of British Pensioners

Canadian Alliance of British Pensioners

The court judgement

July 2002

e-mail Paul Lewis on paul@paullewis.co.uk