Please find below a summary of the meeting about pensions that took place recently through the CABP which Jeff Phillips attended on behalf of our membership. Whilst we hope that this information is of some use to you, please bear in mind Jeff is not a pensions expert and simply attended this meeting to try to gain information for our membership.
You should not rely on the information below for financial planning but should seek appropriate guidance regarding your individual circumstances.
Canadian Alliance of British Pensioners (CABP)
www.britishpensions.com
As mentioned in the RSGSH Bulletin of 6th October, a meeting of the above was held on 25th October to bring people up to date with progress of the legal case laid before the European Court of Human Rights (ECHR) regarding the freezing of UK pensions for residents living in Canada, South Africa and Australia. Presenting the position at this meeting was Peter Kennan, Membership Director of CABP.
Aim of CABP
The aim of CABP and the International Consortium (Canada, South Africa and Australia) is to enable the indexing of UK pensions for UK residents living in these countries. The issue began in the 1950’s when the UK Government of the time laid down that UK pensions payable to those living abroad would be immediately “frozen”. Successive Governments eased off on this stance, with the creation of reciprocal treaties, resulting in approximately 50% of the 1 million pensioners residing abroad not receiving indexed linked pensions. Unfortunately, some countries continue to be affected being Canada, South Africa and Australia.
History
In 1993 a Parliamentary Commission was formed to consider the issue at hand, resulting in Labour MP’s withdrawing their support in having the pensions index linked and the motion failing. In 2002 Annette Carson, a UK resident in South Africa, brought a case to the UK Courts claiming discrimination. After consideration, the presiding Judge ruled that the decision should be referred back to Parliament and the Appeal Court. Both the Appeal Court and the House of Lords upheld the Judge’s ruling that the final decision should be left with Parliament.
Following this decision, an International Consortium (representing approximately 45000 members) of affected countries was formed and the case, as we know, lodged with the ECHR three years ago. The verdict of the ECHR has already been made and is due to be made public on 4th November 2008. The Canadian Government has been fully supportive of this case and the moves made to ensure equality for its resident population of UK pensioners. Effectively, should the case be won, Canada’s economy will be in receipt of a further $300 million in potential income.
So, what next?
If the ECHR provide a negative verdict, the Consortium will consider advice from its legal counsel based on the Judges vote.
If a positive verdict, there will follow:
- Intensive (and expensive) lobbying of Parliamentary members
- Request for a speedy implementation of the index linking and payment
- An attempt to head off any Government appeal against the ruling (they have 90 days to lodge the appeal)
Increasing your future pension
Using rounded up figures; a full pension (on today’s values) would be worth £4800 per year and requires 30 years National Insurance Contributions.
Each year’s Contributions will provide a return of £160 in State Retirement Pension, for life.
Bonus – A spouse will receive 60% of the £160 (£96) IN ADDITION to the £160 providing a total Pension income of £256 per year, which would provide (for 30 years Contributions) a combined Pension of £7680.
To buy added years,
you would need to pay (approximately) £400 for every missed year of Contributions (at Class 3 National Insurance Contributions rates), receiving a return (as mentioned above) of £160/£256 for every year purchased.
The law states that you can purchase (or buy back) a maximum of 6 years but, at present, you can buy back 11-12 years, then continue to buy until retirement age. However, this option only remains available until 5th April 2009 and people are urged to place their claims with Newcastle (HMRC National Insurance Contributions) by 8th November 2008.
Currently in receipt of pension?
For those receiving a pension and born after the following dates,
5th April 1933 Men
5th April 1938 Women
you may be able to buy back additional years at no or little cost. However, you will need to seek the advice of CABP or HMRC National Insurance Contributions.
Finally, the CABP need people to:
Become New members
Write letters to the Parliamentary representatives
Sign petitions
Spread the word
Jeff Phillips
