Unfair British Pension System discriminates against Caribbean residents

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For many years the International Consortium of British Pensioners (ICBP) has been battling the unfairness of the U.K. legislation and the detrimental affect it has on 550,00 British pensioners living in a large number of countries around the world.

Some 7,500 British pensioners living in the Caribbean (except Jamaica and Barbados) have their pensions cut each year just because they have decided to live in the Caribbean, many of them returning home after having worked in the U.K..

When the U.K. Government originally legislated for a British pension system and in subsequent years, they entered into reciprocal agreements with some countries.  Agreements were between the U.K. and 46 countries out of 196, less than 25%.

The reciprocal agreements were intended to ensure that only one of the two countries charged an individual for pensions contributions.  However, the lack of a reciprocal agreement has been used as an excuse not to pay pension increases to individuals in those countries where an agreement does not exist.  In essence, it was a double penalty.

The question which needs to be asked ask is why a British pensioner should be penalised by the U.K. Government just because they elect to contribute to an additional pension system in another country?  It makes about the same amount of sense as saying that the U.K. state pension should be restricted because someone has a private pension in addition to their state pension.

In 1981 the U.K. Government determined that it would not enter into any more reciprocal agreements thereby freezing out hundreds of thousands of British pensioners from their entitlement to pension increases.

However, there are some inconsistencies in the policy.  Not only did the U.K. Government enter into an agreement with Barbados in 1992, eleven years after the cut off date, but also the U.K. Government have social security agreements with Canada, New Zealand and Japan but British pensioners living in those countries do not get pension increases.

Within the Caribbean there are over 7,500 British pensioners who are affected by this ruling, 550,000 worldwide.  Many of the British pensioners living in countries where the discrimination applies are not U.K. citizens, particularly in the Caribbean.  They are people who went to the U.K., mainly in the 1960’s, and then returned to their home countries.  However, having paid into the U.K. pension system are entitled to a U.K. pension.

In 2004 Sir Steve Webb, a previous Pensions Minister, said in the U.K. Parliament –

The British Government are free riding on the welfare states of countries that British citizens are moving to”  …”We are asking other countries taxpayers to support our pensioners”… “The composition of the list of countries where one does have uprating and the list of those where one does not is pretty odd”…. “It hard to understand the logic”…. “The entire pattern was arbitrary.” “There is no logic to it and it is hard to justify the situation we are in.”  “The question relates to cost but sorting out unfairness does have a cost”……We are not feathering the nest of the favoured few, but justice” ….The question is moral rather than legal …”The moral claim rests on the fact that we have a contributory pension system .We ask people to make contributions all their life to accrue an entitlement. Why should that accrued entitlement vary according to where they choose to live?”….That doesn’t sit well with the idea of a contributory system”…. “Different Caribbean countries have different rules which seem crazy.

Why has the Caribbean Marine Association become involved?  It was brought to our attention that there are may British pensioners who arrived in the Caribbean on yachts or came here to work in the marine industry and have contributed substantially to the economy of the Caribbean yet are suffering as a result of having come here.  Some have even been forced to return to the U.K. as they could no longer survive on their reduced pensions.

With the U.K. Government now being faced with 1.2 million British pensioners living in Europe and an agreement needing to be entered into with EU countries, it would be totally unfair for the U.K. Government to come to an agreement with them and not with the other half a million pensioners worldwide.

It has been suggested the the cost would be too high.  Around one billion pounds.  That is less than the cost of ten F35B jet fighters the U.K. Government intends to buy from the US.  It is only 0.06% of the annual cost of British pensions, a mere pittance in the overall pension cost, or 0.07% of the cost of health care or 2% of the defence budget.  Obviously, fighter jets are more important to the U.K. Government than the welfare of hundreds of thousands of its citizens.

There is a final point.  There are over 7,000 known British pensioners in the Caribbean but there are probably a couple of thousand who have never told the U.K. Government that they have left the U.K. and are using friends or relatives addresses in the U.K. as contact points.  These pensioners are receiving their full annual increases.  There are even some who boasts of still receiving a winter heating allowance despite living 80*+ (26*+ C).  As with all bad legislation, it is the honest people who suffer and the dishonest who get away with benefitting from an unfair law.

John J Duffy

President – Caribbean Marine Association

+1 268 562 6611