UK state pension going same way as Australian ?

[HauptmannUK]

I'm a long standing member of the Conservative Party and when in the UK I regularly attend events at my local Conservative Association.

We frequently get sent policy proposals from CCO to discuss and obtain feedback from members.

A hot topic over the last year has been the suggestion that expats should have their state pension rights restricted. Somebody in CCO has obviously looked at what the Aussies are doing because the proposed changes appear very similar to how I understand the Australian system to work.

Apparently the number of British pensioners living abroad is around 1 million, the number having almost doubled in the last ten years. The vast majority of these receive a private pension in addition to their state pension. Restricting state pension payments along Australian lines could save large sums of money (they are quoting figures of well over £billion/year).

At the moment these ideas are just being circulated for discussion, however my impression is that in general most Conservative Party members are not sympathetic towards expats and I think policy makers may feel that, post-Brexit, there is a opportunity to save money with minimal impact at the polls. 

Watch this space.

[Rally123]

28 minutes ago, HauptmannUK said:

Apparently the number of British pensioners living abroad is around 1 million, the number having almost doubled in the last ten years. The vast majority of these receive a private pension in addition to their state pension. Restricting state pension payments along Australian lines could save large sums of money (they are quoting figures of well over £billion/year).

And how much would it cost the UK if all those expats were to return home? I'm sure the UK saves heaps of money due to pensioners living overseas. So to penalise expats and get us to return home is counter productive surely?

[Kwasaki]

I would say if UK gov take on and go the same way as the Oz stupid government then it will be grandfathered.

[Lamkyong]

please tell what is the Australian method ?? 

[simoh1490]

1 hour ago, Kwasaki said:

I would say if UK gov take on and go the same way as the Oz stupid government then it will be grandfathered.

I agree. But grandfathering will take far longer for the savings to be realised hence the risk is probably in a different area, I suspect taxation or exemptions will be the target and those are things that won't be grandfathered.

[simoh1490]

7 hours ago, Rally123 said:

And how much would it cost the UK if all those expats were to return home? I'm sure the UK saves heaps of money due to pensioners living overseas. So to penalise expats and get us to return home is counter productive surely?

That's an old argument that is nothing more than a threat that most pensioners wouldn't follow through on.

[HauptmannUK]

8 hours ago, Rally123 said:

And how much would it cost the UK if all those expats were to return home? I'm sure the UK saves heaps of money due to pensioners living overseas. So to penalise expats and get us to return home is counter productive surely?

This is something that is being debated at the moment. I understand that the government has data (presumably from HMRC) showing that the vast majority of expat pensioners have additional income over and above their state pension. So they could take a gamble on the majority of pensioners not returning to the UK. 

Apparently one the people advising on this policy is an Australian called Lynton Crosby, who has advised not only the Australian and UK governments but also NZ, RSA etc. So I guess one can look at expat pensions in those countries to predict the direction for the UK.

At the moment the government has certain obligations under EU law (enforced by ECJ) in respect of pensions for non-residents, but post-Brexit they will not be enforcible.

I guess existing pensioners will be 'grandfathered' but those of us some way from the state retirement age could be hit. 

[sanemax]

9 hours ago, HauptmannUK said:

The vast majority of these receive a private pension in addition to their state pension. Restricting state pension payments along Australian lines could save large sums of money (they are quoting figures of well over £billion/year).

At the moment these ideas are just being circulated for discussion,

The pension money is the money that the pensioners have paid into the system , if they receive any other money, that should be irrelevant .

[sammieuk1]

As a long standing member of the conservative party you should already know the answer kick the crap out of the poor then polish your brogues is standard policy tried and tested for generations . 

[HauptmannUK]

20 minutes ago, sammieuk1 said:

As a long standing member of the conservative party you should already know the answer kick the crap out of the poor then polish your brogues is standard policy tried and tested for generations . 

This thread is about pensions, not politics. However expat pensioners are in the main are not 'poor' by most folk's definition.  And I don't wear Brogues - mostly Ecco or Rieker casuals....

 

I would not support the move to reduce/restrict pensions for expats but I think it will come. Its being successfully applied by other countries with similar pension systems to the UK (Aus, NZ?).  And the savings to the government would substantial.  Moreover it could even be a vote winner since most UK voters seem to display negativity toward expats.  There is certainly support for the current strategy of charging expats for NHS care (150% of the cost I believe).

[simoh1490]

4 hours ago, HauptmannUK said:

This thread is about pensions, not politics. However expat pensioners are in the main are not 'poor' by most folk's definition.  And I don't wear Brogues - mostly Ecco or Rieker casuals....

 

I would not support the move to reduce/restrict pensions for expats but I think it will come. Its being successfully applied by other countries with similar pension systems to the UK (Aus, NZ?).  And the savings to the government would substantial.  Moreover it could even be a vote winner since most UK voters seem to display negativity toward expats.  There is certainly support for the current strategy of charging expats for NHS care (150% of the cost I believe).

Two things:

 

There is support for the NHS surcharge because it is seen as being aimed at people from other countries who gain NHS eligibility and then in later life return to their country of birth/origin.

 

Targeting the pensioner and the expat are soft target strategies that have been adopted by several countries. The US now disallows non-resident Green Card holders from claiming personal exemptions on their tax returns, the effect of which means they are taxed at 24.5% on their Social Security pensions.

 

 

[Rally123]

10 hours ago, HauptmannUK said:

At the moment the government has certain obligations under EU law (enforced by ECJ) in respect of pensions for non-residents, but post-Brexit they will not be enforcible.

As I thought, false news being spread by the Remoaners. I call BS on this.

[simoh1490]

8 minutes ago, Rally123 said:

As I thought, false news being spread by the Remoaners. I call BS on this.

Hmm, so you think that after the UK leaves the EU it will still be required to adopt EU law regarding pensions, is that what you think?

[Rally123]

I'll get back to you on that post Brexit. It's all speculation just like this thread. Australian Lynton Crosby should keep his nose out of UK politics and stop avoiding the paying of UK taxes. 

[simoh1490]

1 minute ago, Rally123 said:

I'll get back to you on that post Brexit. It's all speculation just like this thread. Australian Lynton Crosby should keep his nose out of UK politics and stop avoiding the paying of UK taxes. 

You called it BS posted by Remoaners when in fact you don't know! 

 

As things stand presently the requirement to pay non-resident expats their state pension in Europe is enshrined in EU law which in turn has been copied into UK law. If the UK leaves the EU and if the UK repeals all EU law, there will be no legal requirement for the UK to pay those pensions yet our cash-strapped government may continue to do so out of the goodness of their hearts because they like pensioners! 

[Rally123]

 

Quote

 

13 SEPTEMBER 2017 • 10:35AM

British pensioners who live in the EU will continue to see their state pension payments increased each year after Brexit, the Government has indicated.

There had been fears that millions of expats who live in Europe would see their pensions "frozen", meaning their value would be steadily eroded over time. This is the situation in countries such as Canada, Australia and New Zealand, where British state pension payments to expats are not increased each year in line with inflation.

But an official update, published quietly last month, confirms that the British government intends to continue increasing state pensions to expats in the EU after the UK leaves the EU in 2019. The update showed that Britain and the EU had the same position on annual increases: that they would continue to be made as now after Brexit.

In addition, National Insurance contributions made while abroad will also continue to count towards the state pension. You get the full state pension, worth £159.55 a week, if you have 35 or more "qualifying" NI years on your record.

James Walsh, of the Pensions & Lifetime Savings Association, a trade body, said: "The UK and EU have agreed that the UK will continue paying and uprating state pensions to UK citizens living in EU countries after Brexit – and vice versa. 

 

"This means, for example, that British pensioners living in Spain will continue to get the same annual inflation increases they would have got in the UK. The same will apply to Spanish pensioners resident in Britain."

The agreement also covers people in countries that are part of the European Economic Area – Norway, Iceland and Lichtenstein – as well as Switzerland.

The state pension is increased by the "triple lock", meaning payments rise each year by the highest of earnings, inflation or 2.5pc. The mechanism has ensured pensioners' income keeps pace with the rising cost of living.

However, by 2020 the Conservatives want to remove the 2.5pc underpin leaving a so-called "double lock". In July the Government announced it was to push back the state pension age, meaning around six million people will retire later than under previous plans. 

As with other policy areas, the whole Brexit deal will have to be approved by British and European parliaments and governments. But it is thought the agreement over state pension is unlikely to be a sticking point now a deal has been struck.

"The fact they have been agreed so early in the process indicates they are seen as uncontroversial which will come as a relief to pensioners across the EU," said Mr Walsh.

 

Experts had warned that pensioners who retire overseas could have been up to £50,000 worse off if an agreement had not been reached.

 

 

[simoh1490]

2 minutes ago, Rally123 said:

 

 

You miss the point entirely.

 

You posted an article from somewhere or other which describes the UK's intent, as of the article date, on this subject. What is not mentioned is that there will not be a legal requirement for the UK to carry through on that intent nor that the legal requirement will be removed with the repeal bill. 

 

As said earlier, they may continue to pay, out of the goodness of their hearts and because they like pensioners, no more, no less.

 

 

[steve187]

i can not see the Uk government stopping state pension to expats, but i could see them trying to cut the personal tax allowance, which would be easier to do and instant, with could be with no grandfathering rights.

[simoh1490]

Governments want state pension money spent in the home country, not overseas, that way the payments benefit the home economy rather than some overseas economy. A pension that is paid for example to a British pensioner in Thailand does absolutely nothing for the UK economy but it does help Thailand's. And if that pensioner were to return to live in the UK, in these days of reducing benefits, the chances of the pensioner being an overhead or financial burden are small since most pensioners have multiple sources of income. Gone are the days when the pensioner could rock up to the Council Offices are say, take care of me, I'm broke and homeless and the government knows that.

[steve187]

7 minutes ago, simoh1490 said:

Governments want state pension money spent in the home country, not overseas,

why then, are they not concerned when you live in the EU.

[simoh1490]

3 minutes ago, steve187 said:

why then, are they not concerned when you live in the EU.

They are concerned, but EU membership has meant they are legally required to keep paying those pensions, even though the recipient is non-resident.

 

The pension uplift or annual cost of living increase is paid on a country by country basis but only in countries where there is a reciprocal agreement, at present UK pensioners in receipt of UK pension and resident in the EU receive that uplift. Will that change? Dunno, it's an anomaly that people in some countries do get it but in other countries, they don't, it makes no sense to run two parallel systems and they clearly are not going to uprate everyone. 

[vogie]

Courtesy of the Telegraph.

British pensioners who live in the EU will continue to see their state pension payments increased each year after Brexit, the Government has indicated.

There had been fears that millions of expats who live in Europe would see their pensions "frozen", meaning their value would be steadily eroded over time. This is the situation in countries such as Canada, Australia and New Zealand, where British state pension payments to expats are not increased each year in line with inflation.

But an official update, published quietly last month, confirms that the British government intends to continue increasing state pensions to expats in the EU after the UK leaves the EU in 2019. The update showed that Britain and the EU had the same position on annual increases: that they would continue to be made as now after Brexit.

 

[simoh1490]

2 minutes ago, vogie said:

Courtesy of the Telegraph.

British pensioners who live in the EU will continue to see their state pension payments increased each year after Brexit, the Government has indicated.

There had been fears that millions of expats who live in Europe would see their pensions "frozen", meaning their value would be steadily eroded over time. This is the situation in countries such as Canada, Australia and New Zealand, where British state pension payments to expats are not increased each year in line with inflation.

But an official update, published quietly last month, confirms that the British government intends to continue increasing state pensions to expats in the EU after the UK leaves the EU in 2019. The update showed that Britain and the EU had the same position on annual increases: that they would continue to be made as now after Brexit.

 

You also have missed the point.......right now those payments are a function of the law, after Brexit they will be a function of good will only.

[Rally123]

2 hours ago, simoh1490 said:

You called it BS posted by Remoaners when in fact you don't know! 

And you do?

[simoh1490]

46 minutes ago, Rally123 said:

And you do?

You are the one who called it BS, not me! I've merely reminded you that it's currently a legal requirement to pay the pension and post Brexit it won't be. 

[midas]

How much of any of it is sustainable at the end of the day?

 

Huge pension fund deficits are a global crisis in waiting

 

Quote

The pension industry is already in a deep financial crisis and could well be the trigger for another global financial and economic meltdown. This has largely been overlooked. 

 

http://theconversation.com/huge-pension-fund-deficits-are-a-global-crisis-in-waiting-88420

[jacko45k]

17 hours ago, simoh1490 said:

That's an old argument that is nothing more than a threat that most pensioners wouldn't follow through on.

You may see it that way but there certainly would be some Expat retirees who can no longer afford medical care if their state  pension was no longer paid. Nor would I feel too happy that I have kept up my NHI stamps  since retiring early to qualify for that State pension. I know a few here who really do depend on the State component.  

[soalbundy]

18 hours ago, simoh1490 said:

I agree. But grandfathering will take far longer for the savings to be realised hence the risk is probably in a different area, I suspect taxation or exemptions will be the target and those are things that won't be grandfathered.

If you don't live there and have no assets in the UK you can't be taxed,as for exemptions even the conservative party has to stay within certain limits of civilized law, beware a conservative government slipping loose from the EU.

[wombat]

19 hours ago, Lamkyong said:

please tell what is the Australian method ?? 

 

[soalbundy]

59 minutes ago, jacko45k said:

You may see it that way but there certainly would be some Expat retirees who can no longer afford medical care if their state  pension was no longer paid. Nor would I feel too happy that I have kept up my NHI stamps  since retiring early to qualify for that State pension. I know a few here who really do depend on the State component.  

NHS is dependant on where you live not on your contributions, if you live in Thailand you are paying for nothing.