Pensions: Expatriates

Rebecca Smith Excerpts

Tuesday 20th May 2025 Westminster Hall

[Rebecca Smith (South West Devon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) on securing this important debate, and I thank everybody who is here to take part; it is heartening to see what is, to all intents and purposes, cross-party consensus on this long-term issue, and I am grateful to be able to speak about it today.

It is worth reminding everyone in the Chamber that, as we have heard, this is a full cross-party challenge that we have faced over the last decades and that, as we have also heard, successive Governments, be they Conservative, Labour or Liberal Democrat, have not grappled with it enough. I am grateful that that point has been raised, because I do not think it would be honest of us to reflect on it in the way that had been done previously.

We have a duty of care to pensioners at home and abroad, and I believe we are all in agreement about that today. However, we have heard much about inconsistencies in how support is delivered and about the ultimate postcode lottery; we speak of postcode lotteries a lot in this place, but this one perhaps wins the prize for being the ultimate postcode lottery. The arguments have been well rehearsed.

The two strongest criticisms of the existing overseas pension system are, first, that most pensioners do not realise that the frozen pension policy exists—perhaps before emigrating to live with their family, as we have heard—and, secondly, that not all British pensioners overseas are impacted by the policy because of reciprocal arrangements, as a result of which, there is a very unequal playing field. Like many here today, until an elector emailed me when I was a candidate in the election, I was not fully aware of this situation.

A large number of overseas pensioners are covered by reciprocal arrangements, which enables us to treat overseas pensioners moving to the UK comparably with UK citizens living abroad. In total, about 60% of overseas pensioners are covered by reciprocal arrangements, which, where possible, is of course the preferred option for pensioners.

However, we have heard some harrowing cases, and Anne Puckridge has certainly got her mentions this morning. That 99-year-old veteran of world war two has lived in Canada since 2001 and is still receiving the £72.50 a week that she has received for 24 years. With 442,000 people receiving a frozen state pension overseas, and often receiving as little as £65 a week or indeed less, the real-life impact of this approach is considerable.

In my South West Devon constituency, I have heard from Denise Bateman, formerly of Ivybridge and now residing in Australia; Gillian Clarke, another Australian resident, who at the age of 87 has seen no increase in her state pension in 27 years; Stephen Mumby, also a resident in Australia; Clive Gray; and Deborah Matthews and Laurie Morbey, who have both raised this issue with me. They are predominantly resident in Australia, but there are also examples in New Zealand and Canada.

As their correspondence highlights, those people could have moved to Turkey or the Philippines, and they would be receiving an unfrozen pension. Yet, they have moved to Commonwealth countries and, despite having worked for many years and contributed to life in the UK, are now faced with a limited pension. Anecdotally, those I have heard from in Australia lived and worked here for far longer than some of those now living in Europe. Indeed, some good friends of mine are retired and have lived in Europe since before I was born, yet they still qualify for the state pension and receive the full pension, having not even worked here in the last 50 years.

As with anything of this nature, the Government need to make sure they properly communicate pension terms to people well ahead of the time they expect receive a state pension. We have seen in the WASPI women campaign the issues that can be caused, and I believe that no one wants to replicate that. British citizens need to know the implication of any move abroad so that they can plan. That is the fairest thing to do, and perhaps work could be done—for example, with well-known employers or organisations in countries that generally support emigration—to help improve the information flows on this topic, in addition to the work that the Department for Work and Pensions and others are already doing.

In 2020, the cost of uprating frozen pensions to 2020 levels was estimated to be around £600 million, and the cost of uprating to today’s levels would be significantly higher. However, as we heard, the End Frozen Pensions campaign has suggested that people do not want the backdating and are happy to see their pension uprated from this point in time, which would cost £55 million. It is worth reflecting that Ministers appear to be having to hunt for cash down the back of the sofa, and I appreciate that the Chancellor has to make the sums add up. That said, the End Frozen Pensions campaign has clearly highlighted that overseas pensioners are in effect net savers for the UK—there is no burden on the welfare system or the NHS—meaning an aggregated saving of around £2,500 per person, as the hon. Member for Strangford (Jim Shannon) highlighted.

As we have heard, the current system of reciprocal agreements ensures there are protections on both sides for countries in the EU or the EEA, and I am happy to support that long-standing and right approach. However, in the light of the new voting rights, which we have also heard about, this is perhaps the right time for the Government to start exploring conversations on further reciprocal arrangements, especially with Commonwealth friends such as Canada, New Zealand and Australia—countries to which my own constituents have moved. We have heard about the diplomatic awkwardness that this issue causes, which should also prompt such conversations.

The Liberal Democrats mentioned the challenges around pensioners and pensions, and we understand the difficult situations caused by the lack of compensation for the WASPI women, the cruel cut to the winter fuel allowance and the fact that the Government pledged to reduce energy bills by £300 without mentioning that we may all have to wait until 2030 for that to be delivered. Pensioners up and down the country are understandably losing confidence in this Labour Government and in the Prime Minister.

We have talked about the 442,000 people receiving a frozen state pension, but what will the Government do about the 10 million pensioners here in the UK who have had their winter fuel allowance removed? I was surprised to hear that an additional 100,000 pensioners accessed A&E departments last winter, compared to the winter before, which is a direct consequence of Labour’s policy to literally leave pensioners out in the cold.

It really does not matter what dedicated campaigners say in this debate, because we all know that when it comes to issues facing pensioners, we could argue that the Government have their fingers in their ears. However, today is a chance to break the cycle, and for this new Government to be the one that makes this change. It sounds as though there would be enormous support in the Chamber if they chose to pursue that.

We need to push for more action to deliver reciprocal agreements, if possible, with allies such as Canada, Australia and New Zealand, where the overwhelming majority of those with frozen pensions currently reside. That should help to provide more security for all those still affected. None of the Front Benchers here has been a Minister before, so we get the privilege of being a fresh pair of eyes, while recognising the lack of action in the past, whether that be under the Lib Dems, Labour or Conservatives, as we have discussed many times. I understand the Minister’s previous expert experience in this field, and he might have a few ideas of his own, which I look forward to hearing.

I appreciate the concerns raised by colleagues about specific cases, and I sympathise with those who committed so much to our country in their early lives, only to face challenges unprepared, when they should have been made aware of them. Information is clearly going to be a large part of the solution, and debates such as this go a long way to raise the profile of issues that do not always get the airtime they deserve. Judging by the Minister’s nods during the debate, I believe that he agrees, and I know from other things he is doing that information is top of his agenda. I hope we will see some commitment to that this morning.

Finally, I plead with the Minister to get the tone right this time. As discussions take place, will he please not treat these pensioners like the WASPI women and those affected by winter fuel payments? He should be honest in the debate, think clearly about the cost and provide constructive solutions that can help reduce the number of pensioners in this position in five, 10, 15 or even 30 years’ time.