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GP Masthead
Steve Webb and frozen pensions PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 28 February 2012 11:28

Roughly half of all UK State Pensioners who retire to live overseas have their State pensions frozen. The other half enjoy regular annual upratings.

So a London pensioner retiring to, say, Jamaica gets an uprated pension but her neighbour who retires to, say, Trinidad sees her pension frozen from the day she leaves the UK.

Unfair?

I’d say so.

UK Pensioners living abroad are naturally angry and upset about this. But they had great hopes that things would change with the arrival of Lib Dem, Steve Webb, in the Department of Work and Pensions.

After all, Professor Webb is the pensions expert.

And he signed an early day motion in 2007 which specifically called for all UK pensions to be uprated annually.

This is EDM 858 which Webb supported on 18 April 2007: 

That this House notes with concern that 520,000 British pensioners living abroad have their pensions frozen in value and thus not increased when the pensions in the United Kingdom receive annual increases; believes the practice of freezing these pensions is wholly unfair, discriminatory and irrational especially when some pensioners living overseas do have their pensions increased annually; believes that all pensioners living abroad, many of whom have made lifelong mandatory payments to their state pensions, are deserving of this annual increase; and urges the Government to bring forward proposals to end the evident unfairness in the current arrangements.

Many ambitious politicians steer well clear of signing Early Day Motions. Signing one pins you to a position. It means the loss of flexibility that upwardly mobile politicians prize so dearly.

But in 2007, I suspect Webb believed he had more chance of winning the national lottery than becoming Secretary of State for Work and Pensions.  It probably never occurred to him that he might be in a position to deliver the clearly stated position set out in EDM 858. 

Webb has been actively involved in the debate on frozen pensions for years. He can’t say he signed the EDM in ignorance of the facts.

In January 2004 he asked the then Pensions Minister, Malcolm Wicks, for an estimate of the cost of increasing the state pension in line with the usual uprating for UK citizens who reside in countries where the UK state pension is frozen. (£400m since you ask.)

He tabled an amendment to the Pensions Bill in 2004 stipulating that

all state retirement pensions in payment to pensioners living outside the United Kingdom shall be subject to annual uprating by the same percentage rate as is applied to such pensions payable to pensioners living in the United Kingdom. 

The Daily Telegraph reports he withdrew it “after some blandishments from the then Minister, Chris Pond”.

Steve Webb knows there is an injustice that cries out to be remedied.

And he is in the fortunate position of being able to do something about it.

If he chooses to.


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Download this file (Frozen pensions.pdf)Frozen pensions.pdf[Frozen Pensions. House of Commons Library note]221 Kb
Last Updated on Friday, 02 March 2012 14:24
 
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