Pensions: Expatriates

Kirsty Blackman Excerpts

Tuesday 20th May 2025 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

Eleven years ago, my colleague Ian Blackford stood in pretty much this spot talking about exactly the same thing. Exactly the same arguments that were made during that debate could be made today. Things have not moved on. We are not in a better position. At that time, we were talking about 550,000 frozen pensions; now we are down to 500,000. People are dying before they receive their entitlements.

Pensions are a social contract. We pay our national insurance and our taxes into the system in the expectation and with the understanding that we will get something out of it when we become pensioners. This is not party political: it applies to all Governments over the last 70 years. No UK Government have been willing to fulfil the contract with pensioners who choose to live in a certain country. I do not think that that is fair. When we begin to pay taxes, we are not told that our pension entitlement will vary if we choose to live in one of these countries.

That they are overwhelmingly Commonwealth countries seems even more bizarre. We have a special relationship with the Commonwealth: for example, 12% of Canadians claim Scottish heritage and 14% claim English heritage. Scotland is a nation of emigrants as well as a nation of immigrants—not an island of strangers. It is a brilliant thing that we Scots are found all over the world. In a significant number of places, people with Aberdeen accents can be found speaking the Doric.

People should be allowed to go and live with their family in the expectation that the Government will continue to support them in older age, not pull the rug out from under them. They have paid into the system just the same as the people who choose to live here. In fact, as the hon. Member for Strangford (Jim Shannon) says, they are taking less out of the system than those who continue to live here. The cost-benefit analysis shows that people overseas are not using the NHS here on a regular basis. They are not getting the free prescriptions in Scotland. They are not getting prescriptions down here. They are not getting a free TV licence—well, nobody is getting a free TV licence. They are not getting the benefits that an older pensioner living in the UK would expect. They are not taking those things out of the system, yet the UK is still unwilling to uprate their pensions. They are going to live with their families, in a significant number of cases, and not getting their entitlements.

The Deputy Prime Minister previously said:

“The situation is unfair, illogical and doesn’t make sense.”

It has never been enough of a priority for any Government to sort out, but given the current Government’s electoral standing with some older people on the basis of WASPI and the winter fuel payment, it might be an idea to solve the situation now and gain back some of that capital.

A lady who lives in Canada is coming to visit Scotland in June and is going to pop into my office while she is here. She is from Aberdeen. She went to St Margaret’s school and her husband went to the school I went to; there is an annual music prize awarded in his honour. At the end of her email asking to come and see me, Maureen added something about frozen pensions:

“I believe the Prime Minister is not happy about us Canadians kicking up a fuss. We have been doing it for at least 15 years, but no one listens.”

That is the biggest injustice of all: the fact that we are not listening.

I am pleased that the hon. Member for Farnham and Bordon (Gregory Stafford) has secured this debate. Like many of us, he is standing on the shoulders of giants: the issue has been brought up for years and years, but we have never managed to make enough of an impact on the Government to get the change to happen and have them recognise that this is important. As several Members have said, now that we have had a change in the electoral rights of people overseas so that they are able to vote for longer, perhaps the Government will feel more under pressure. But it should not have taken that. It should have been understood that this was a moral decision. It does not matter where someone chooses to live out their twilight years; they should have the same entitlements as others who have paid the same amount over the years.

The hon. Member for West Dunbartonshire (Douglas McAllister) spoke about his constituent from Clydebank who worked in Govan. The country has been built—these islands have been built—on the hard work of these people throughout our manufacturing history. Anne Puckridge, who is an unbelievable human being, was in the RAF and made a huge input to our prosperity and the safety and security of these islands. We are paying these people back by saying, “Nah, you’ve paid the same as everybody else, but you’ve chosen to live in a different postcode, so we’re not paying it.” This is an injustice that needs fixed.

I know that I have managed to speak for seven minutes, but actually it is pretty difficult to stretch this out. All there is to say is, “This needs sorted. Please could you sort it?” That is the passionate case that we are all making on behalf of our constituents and those who might choose to move to other countries in future. We do not want them to have to ask, “Do I want to live in Canada where my daughter lives? Do I want to live somewhere else, or do I have to stay here because I cannot get my pension uprated?”

I am not asking for a full commitment on any of this. I am not asking for all the backdated stuff. I am not asking for a commitment for every single individual. I understand that some international agreements may have to be made to make some of this happen. But I want the Government to say, “We recognise that this is a priority for people and that there is an unfairness in the system. We will look at doing what we can to ensure that people, no matter where they choose to live, get the pensions that they are entitled to.”

[Peter Dowd (in the Chair)]

I remind Members that we are not supposed to use the second person. Please address things through me and not directly to other Members.

--- Later in debate ---

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for opening today’s debate, which was granted by Backbench Business Committee, and for setting the scene so well, in a way that others then followed.

I thank all hon. Members who made the time to speak and set out their cases. They covered issues that are important to many state pension recipients living abroad. I recognise that those who are affected, who obviously cannot speak today, feel strongly about this issue; many of us, in their shoes, would feel the same. On that basis alone, it is right to debate this subject and to hear from hon. Members about their constituents, including my hon. Friend the Member for West Dunbartonshire (Douglas McAllister), the hon. Member for Aberdeen North (Kirsty Blackman) and others who are not in Scotland.

Late last year, my predecessor, now the Economic Secretary to the Treasury, met Anne Puckridge and others from the End Frozen Pensions campaign to discuss the policy’s impact. We have listened, and I read case studies every week, either from hon. Members who have written in about them or in letters directly from pensioners themselves. We are all aware that there are many countries where high inflation has posed particular challenges in recent years, so I recognise the salience of today’s subject matter.

We all recognise the importance of the state pension, as the UK’s foundation of support for older people. In 2025-26, the Government will spend over £174 billion on benefits for pensioners. That represents 5.8% of the UK’s GDP and includes £145 billion spent on the UK state pension, including for those living abroad. I raise those facts because they are important; they sit behind the debates that we often have here or in the main Chamber about the size of the state and the level of taxation.

As hon. Members are very aware, the state pension is uprated abroad only when there is a legal basis for doing so, which is why we are here today.

[Kirsty Blackman]

On that, the state pension is uprated abroad only when there is a legal requirement to do so. There is no legal bar to the UK uprating those pensions in countries where there is not a reciprocal agreement in place.

[Torsten Bell]

There must be a legal basis for making payments. However, the hon. Member is right to say that under the specific policy I am setting out, payments are made only when there is a legal requirement to do so. As the hon. Member for Farnham and Bordon set out right at the beginning, that is a long-standing policy that has lasted for 70 years. For many years, the priority for successive Governments of all parties has been to prioritise those living in the UK when making difficult spending decisions on pensioner benefits. That was true of the coalition Government, when a Lib Dem Pensions Minister chose for five years not to make any progress on this issue. He did that under a Conservative Government and a Conservative Prime Minister all the way through.

The hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick)—my constituency neighbour—mentioned Lloyd George, who introduced a state pension with no uprating whatever. The first uprating of the contributory state pension in 1946, under the Attlee Government—again, I am making a point about the cross-party basis of some of these decisions—was not paid to pensioners living abroad. So since the beginning, policy on pension uprating has been consistent.

As we have discussed, people move abroad for many reasons—to be with their family, as the hon. Member for Strangford (Jim Shannon) set out, enjoy a particular climate or return to their country of birth. It is for individuals, not the Government, to make those decisions, but when they make them, they will of course consider the impact on their finances, alongside a wide range of other factors. As the hon. Member for South West Devon (Rebecca Smith) set out, our duty is to ensure that information regarding the effect of living abroad on the state pension entitlement is available. These days, that is on gov.uk, and includes information on where the uprating does and does not occur.

Pensioners who have retired to other countries will obviously take into account the UK state pension position, but they will also look at the wider provision for pensioners in those countries. Many countries will have a means-tested provision that is similar to the UK pension credit. It is true that the real-terms value of some people’s state pension will fall over time, but in most cases, particularly in the countries that have been mentioned today, that will be compensated for by higher means-tested payments when they are living abroad.

It is also important that further advice can be obtained from the International Pension Centre or the Pension Service. The hon. Member for South West Devon asked whether there is more we can do, and I want to be clear that I am always open to new ideas about what more we can do to communicate what happens to the state pension if people choose to retire abroad. More generally, I am happy to meet with any hon. Members who have suggestions in that area.