Half a million UK citizens living abroad in their retirement have had to suffer having their state pension entitlements frozen at the level they were at when they first moved away.
This is not because they decided to retire abroad but rather because they chose to retire to countries that have no “reciprocal agreements” with the UK with regards to such things as state pension payments.
There is a simple rule: if you leave the UK and retire to certain countries, your state pension entitlement is increased just as though you were still in Britain. But there is another simple rule: if you leave the UK and retire to certain other countries, your state pension is never increased again, staying frozen in time – or, actually, becoming worth less and less in real terms as time marches on.
I suppose these are not difficult rules to understand. But what is hard to comprehend is why we have such rules at all in the first place. It just does not seem like a very nice thing to do to people. It has nothing to do with how much or how little you paid in National Insurance contributions when you were accruing your entitlement while working in the UK either.
You may have seen a rather well-publicised case in the papers recently, regarding a lady called Anne Puckeridge.
She is a 94-year-old who served in the Second World War, as most of her generation did. She lived and worked in the UK until 2001, when she reached the age of 76 and moved to Canada to live near her daughter.
Her state pension was £72.50 a week in 2001 and it is still £72.50 a week in 2019. Had she not moved to Canada, her state pension would be nearly twice that now. Any financial adviser will tell you a pension that does not increase in payment will probably halve in value during a “typical” 20-year retirement.
It is one of those things you hear people saying all the time in this industry – and it is true too.
Some members of parliament have felt so moved by the plight of Puckeridge and the half a million other UK expats in the same predicament as her that they have been calling for a debate in the House of Commons on the issue. That is to be applauded and I hope they manage to get our otherwise busy lawmakers to consider it.
It is another state pension issue – like that of the millions of so-called Waspi women who were not properly informed of momentous changes to the state pension system – that one hopes will not simply be ignored.
We need a state pension system that we can both rely on and be proud of, whatever age we are; one that cares for our senior citizens and that quickly puts things right when they go wrong.
Steve Bee is director at Jargonfree Benefits