UK State Retirement Pension changes

[margaretcarnes]

Further to several other discussions on pensions in the past, the UK government has just announced that Brits living in countries such as Australia and New Zealand WILL NOW QUALIFY FOR THE ANNUAL INCREASE TO THEIR UK STATE PENSIONS.

This has long been a contentious issue for Brits abroad, and has affected those in Thailand as well.

A WORD OF CAUTION - before you pop the champagne - there has been no mention yet of Thailand expats. I am assuming that the new rule will apply to all countries not previously covered. Otherwise there is bound to be kicking and screaming about descrimination.
However my local Pensions Service office have not received full details yet, and I'm now waiting for a reply from the national helpline.

Will keep you posted

[Arcadian]

Hi Margaret, I heard on the news that the matter had gone to a European court following rejection in the UK High Court. Has a decision been made?

[bubbly]

I heard on the radio today it would only apply to countries in the comonwealth

[hhfarang]

I heard on the radio today it would only apply to countries in the comonwealth

I was going to write that earlier as I thought I read or saw that on the news somewhere, but I couldn't find anything to back it up so I didn't think I should stick my nose in since it doesn't apply to me.

... but since someone else mentioned it, I too saw or read somewhere that it applied to Britain and anything that is (or used to be?) one of it's territories. I don't think Thailand fits that description.

[PeteC]

Do UK people contribute to this plan throughout their working lives, as US people do concerning Social Security?

If so, I can't see how it's legal for them to withhold payment and/or normal inflation related cost of living increases regardless of where one lives.

It's your money which the government has paid you no interest on, while they use it for all manner of things separate from the purpose it was originally meant for. Given this, cost of living increases are only fair and proper. Pete

[JimboPSM]

I think there has been some wishful thinking rather than actual facts used in some early reports (some of the media never knowingly let the facts interfere with a good story) this extract from a BBC Business News article yesterday gives a reasonable representation of what I have heard and read (no guarantees that it is 100% correct though):

Court hearing expat pensions case

....... The two-hour hearing is taking place in the Strasbourg court on Wednesday, but judgement in the case will not be made until March or April 2010.

Andrew Harrop, head of Public Policy for Age Concern and Help the Aged, said: "It's hugely unfair that pensioners who have made their national insurance contributions all their lives in the UK are being penalised for retiring abroad and losing out on the uprating of their pension."

"We hope the case today will see an end to this inequality and ensure the government gives every pensioner their fair share, no matter where they decide to retire," Mr Harrop said.

The UK Department of Work and Pensions argues that the government's priority is to help the least well-off pensioners living in the UK.

Full article: http://news.bbc.co.uk/1/hi/business/8232612.stm

[niggle]

This argument has been going on for many years.
The reality is that the government simply does not wish to spend one penny more than it has to on pensioners living abroad who probably willl not be voting anyway.

[dtaai-maai]

I heard on the radio today it would only apply to countries in the comonwealth

I'm sure I read/saw somewhere recently that it would only apply to countries with a reciprocal arrangement with the UK. I think I heard the number 19 (countries) mentioned. I'd be surprised if Thailand was one of 'em.

[margaretcarnes]

Yes the countries with reciprocal arrangements with the UK don't have a problem. But Commonwealth and ex Commonwealth countries like Australia for some reason haven't had the same reciprocal arrangements as EU member states, and individual cases have indeed been going on for years.
I'm afraid it wouldn't surprise me at all if Thailand is still left out of the deal, but no further news as yet. But my personal belief is that if the ruling does still leave some countries out the flood gates would open for further legal action.
The problem is of course that UK pensioners affected would have to take up their own cases on the back of the existing one. Depending on what transpires the best way to start would seem to be via Age Concern.

FYI Pete UK State Pensions are indeed based on contributions paid during the persons working life (for a UK employer.) Payments are mandatory and collected at source, like tax. So it is grossly unfair that these pensioners don't benefit to the full extent like those who spend their retirement in the UK. No such conditions are attached when the government starts to take your money. Only when it comes to paying it out!

[Wanderlust]

The irony is that anyone who moves away from the UK, particularly as far away as Asia, will cease to be a drain on the NHS for the most part, as well as not taking up seats on buses and trains with their free passes, and I'm sure there are a host of other things that apply.

[Governor]

Margaret

I know that if I had chosen to retire in an EU country my pension would receive the yearly updates, this led me to wonder what happens to other EU Nationals, do they receive a state retirement pension and if so do they receive increases if they live overseas? I suspect they will all have different rules.

I agree that I think it's unlikely that Thailand will be included in the countries that will receive the uprated pensions, though the downside for some people might be that it would free up fraud investigators to catch those residing in Thailand who use a UK accomodation address to claim their updates and other benefits such as their winter fuel allowance.

I will not preach to the converted by saying how unfair all this is, having made NI contributions, which I realise doesn't pay for the pension, for 40 years my pension will be frozen, though I remain a UK taxpayer, and my taxes go towards the pension bill. Oh well such is life.

On a slightly related subject, I have heard that from October the UK State Pension can be paid electronically into a Thai bank, though sadly only in Thai Baht.

[lindosfan1]

Governor
It does seem grossly unfair to deny UK taxpayers just because they are not resident in the UK, EU or countries with a reciprocal agreements.
They want us to pay tax although we are non resident.
I personally think that if the European courts rule against the government a case will be put forward for the rest of us.

Checked by spell check

[margaretcarnes]

Governor - I suspect most western European countries have better reciprocal arrangements than the UK - as well as better Welfare and pension provision overall. The situation will certainly vary from one EU country to another though, and I doubt the more easterly members will generally fare so well. The one EU country I'm most aware of is Denmark, where pension provision etc is certainly better than ours (hence the unrest there over their present immigration situation.) But their attitude towards pensioners moving abroad to retire reflects just what Wanderlust has pointed out. I.E. savings in health costs, travel concessions, plus things like prescription charges, reduced adult education fees, winter fuel allowances, free TV licences for over 75s etc etc.
Not least in the UK is the saving in Pension Credit - the means tested 'top up' benefit to state pensions which fall short of a living level here, and which isn't paid abroad. Along with Housing and Council tax benefits.
Tax wise - just to pick up on Lindosfans post - yes the UK government wants our taxes of course. And tax liability does continue beyond pensionable age when combined pension income is over the tax free amount. But the highest level of basic state pension (currently £95.25) is below the single person tax free allowance. As far as I'm aware this is always the case, so that people on basic pension alone, with no other taxable income, are never liable for tax.
Unfortunately interest on most savings counts as income for tax purposes so pensioners who have saved prudently suffer a double whammy. The UK government has made a pathetic attempt to redress this imbalance with a rather complicated version of Pension Credit, which you really don't want me to go into at the moment! None of which explains their continued reluctance to pay what is due to Thailands' Brit expats. And I'm sorry for the rant but it really gets my goat. If the rules were fair and equally applied many expat retirees would have no reason to dodge the system anyway.