Corbyn boost for campaign on expatriates' frozen pensions

If you move to the EU, or a seemingly random assortment of other countries, you are treated as though you never left. But if you settle in any one of 120 countries, including the Commonwealth strongholds of Australia , New Zealand, Canada and South Africa where so many people have family, you are not entitled to the inflation-linked uplift in your pension which is such a political shibboleth at home.

Already over half a million UK retirees in those four countries are living on pensions which might be a third lower than those received by people who retire there today, or who retire to Europe or other exempt territories. The division appears arbitrary, for instance retirees in Barbados or Bermuda get increases, but those in Trinidad do not.

Mr Corbyn is a member of an all-party parliamentary set up last year which reconvened this month. The new Labour leader, in a debate in 2000, labelled the policy "entirely illogical" and "morally wrong" and told MPs: "People move abroad, on or before retirement, for a number of reasons to do with home, family or other factors. There is nothing wrong with that. They have paid for, have worked for and are eligible for pensions in this country and I see no reason for the pensions that they receive not to be linked to what is paid here ... We should arrange for the current state pension here to apply to British pensioners wherever they happen to be, provided that they are eligible to receive it."

Another high-profile group member is Keith Vaz, chair of the Commons home affairs select committee, who has said the policy is “archaic and unfair”, complaining that retirees “will punished because they have chosen to retire to India, rather than Europe or the US, or even the Philippines or Macedonia, where British state pensions are not frozen".

Meanwhile almost two thirds of Britain’s under 40s are considering quitting the UK for a new life abroad, a survey clamed last month. The deVere Group poll found 65 per cent of those surveyed said they were ‘seriously considering’, ‘thinking about’, or ‘would be tempted to’ move overseas. The five most popular destinations were New York, Sydney, Cape Town, Dubai and Hong Kong – and of those, only in New York is an unfrozen pension payable.

The Pension Justice campaign run by the International Consortium of British Pensioners says about 1.1 million British state pensioners living abroad save the economy around £3billion a year, because they no longer need the NHS, social services or housing, and have to pay for their own. “About 635,300 have their pensions indexed every year, in the same way as they are in Britain – what’s more many also receive the Christmas bonuses handed out in Britain, and even the winter fuel allowance and a number of other pensioner support payments.”

It says the other 555,750 British pensioners living overseas have their pensions frozen because they have chosen to move to mainly Commonwealth countries. “Britain treats them like second rate citizens, not worthy of their full pensions, despite the fact that this is what they were paying for with their National Insurance Contributions. That £3bn bonus alone in the exchequer would be more than ample to grant pension parity to all British pensioners.”

Scottish couple Joyce Crawford, 73, and husband George, 78, from Glasgow, worked until they were 62 and 65 respectively. Joyce’s pension is frozen at £84 a week – already 26per cent lower than the current £115.95 state pension, The couple’s joint pension is fixed at £194, while the uprated version is at £232 and rising.

The couple moved from Glasgow to Sydney in 2004 to be with their daughter Margaret, 51, her husband Stephen and two granddaughters. They cannot get permanent residency and free healthcare because not all of their children live in Australia, and since they emigrated, the cost of private medical insurance has doubled to $5,600 per year (£2520).

Joyce says: “It is becoming more and more unaffordable. Everyday living costs are also rising – shopping and fuel in particular We are both are in good health now but worry about the future – we don’t want to lose our independence and become a burden on our children.”.

The Department for Work and Pensions says people who consider emigrating should “always consider the impact the move could have on their future state pension entitlement” and adds: "In 2013/14 we spent around £3.6billion on state pensions to expats living abroad. We uprate the state pension in countries where there is a legal requirement for us to do so, or if we have a relevant reciprocal agreement in place with the country involved This has been the case for the last 60 years.”

Campaign chairman David Morris says: “Frozen pensions are causing Scottish pensioners poverty, loneliness and separating families. This is an unjust policy that hits the most vulnerable hardest and must be addressed.”

James McLeod, head of pensions at AES International, said: “It is not unreasonable for people who have worked their whole lives in the UK and who have paid taxes the whole time, to expect their full entitlement when they retire. “Hopefully Corbyn’s appointment will bring this into the spotlight and bring an end to this inequality.”