UK Pensioners, I wait with fingers crossed

Australia could reap windfall if UK pensioner's win Ava Hubble writes: A judgment by the European Court of Human Rights, due to be announced on November 4, could boost Australia's income from the UK by more than $600 million a year.

The matter relates to the British government's long-standing policy of not granting annual pension increases to Britons who retire to Australia and most other Commonwealth nations. This policy, which does not adversely affect Britons who retire to most non-Commonwealth countries, has led to charges of discrimination and breaches of the Human Rights Act. Currently about half of the 500,000 Britons penalised by the policy are living in retirement in Australia. One of their spokesmen, the president of the British Australian Pensioner Association, James Nelson, points out that these expats are denied annual pension increases despite the fact that they contributed throughout their working lives to the UK's mandatory National Insurance Fund pensions scheme. "We are penalised simply because of our place of retirement residence," he protests. Nelson's organisation is among the expat pensioner groups around the Commonwealth which banded together more than eight years ago to fight for equal pension rights for their members.

Three years ago, after unsuccessful suits in London's High Court, Appeal Court and the House of Lords, they took their case on to the European Court of Human Rights. Nelson has just received news from the pensioners' London-based barrister, Tim Otty, that the European Court of Human Rights reached a decision in the matter on October 7 which, in line with the rules of the court, will be delivered on Tuesday, November 4 and posted on the web. The suspense must be very hard to bear. A decision in the pensioners' favour will significantly improve their spending power. Nelson points out that many of the penalised expats have not had their UK pensions uprated in line with inflation since they arrived here 20 or so years ago to join adult, emigrant children. Back in 1988 the basic British weekly pension was £41.15. It is now £90.70 (roughly $A222 a week), Nelson also points out that a decision in the pensioners' favour will also significantly benefit Australia. He noted that it currently costs Australia about $110 million a year to provide supplementary Australian pensions to elderly British expats who have found themselves unable to survive on their unindexed UK pensions.

That outlay would no longer be necessary if the expats win equal pension rights. Even more importantly, Nelson points out that if the 250,000 Australia-based frozen pensioners were to receive the current weekly British pension of £90.70 per week, instead of, say, a long-frozen UK pension of $41.15, the annual income flowing into Australia from the UK's Department of Work and Pensions would be increased by about $A600 million a year. Like the penalised pensioners, Kevin Rudd, Wayne Swan and Jenny Macklin must be impatiently waiting the ECHR's decision.

That was knocked back of course but there is something for people born after 6 April 1945 to think about. The eligibility period for a full UK pension was reduced recently from 40 to 30 years for people born after that date and it is pro-rata. For example I worked in the UK for 18 years before coming to godzone so I was expecting a little less than half the full rate but will get about two thirds.

The thing to think about is that you can buy the missing years. I looked at it a few years ago and buying the 22 missing years wasn't a very good deal, but now I only need to buy 12 to get the full UK pension and it is well worthwhile; particularly as the UK pound is very low at the moment.