Pensions: British Pensioners Overseas

Baroness Benjamin Excerpts

Wednesday 11th March 2015 Lords Chamber

Asked by

[Baroness Benjamin]

To ask Her Majesty’s Government what consideration they are giving to uprating fully or partly the state pensions of British pensioners currently living overseas whose pensions are frozen.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, there are no plans to change the current arrangements for payment of state pension to those recipients who live outside the UK. The policy of this coalition Government is to uprate UK state pensions where they are legally required to do so under the terms of EU law or through a bilateral social security arrangement which covers uprating. Changing the policy as suggested would incur significant costs—moneys which are currently just not available.

[Baroness Benjamin (LD)]

My Lords, I thank my noble friend for that Answer, but it is unbelievable that British pensioners who have paid in their full contribution do not receive their full pension when they retire to many parts of the world, including to the Commonwealth. If full uprating is thought to be costly and a liability for back-payment claims, will the Government adopt the solution of partial uprating of frozen pensions at their current level, since this involves neither of these barriers? It is affordable, it is cost effective and it will stop the gradual decline of pensions year on year. I beg the Government to include a partial uprating option in the Budget and put an end to this injustice once and for all.

[Lord Freud]

I regret I cannot give my noble friend any comfort. Full uprating to today’s levels would cost us more than £0.5 billion and while partial uprating—in other words, just starting to move current levels of pensions up by the increases—would start off being much less than that, those costs would rise in the medium term to a level similar to the full uprating.