BeeHive > BeeLines > Ruling on UK State Pensions payable overseas
Ruling on UK State Pensions payable overseas
There has just been a ruling in the House of Lords in the case of Annette Carson that will affect nearly half a million Britons who have retired abroad. Annette Carson, if you remember, is the lady who emigrated to South Africa in 1989 and whose UK State Pension which is paid to her there has never been uprated since because there is no reciprocal agreement between the UK and South Africa.
It’s not just South Africa where no such agreements are in place, countries like Australia, Hong Kong, Zimbabwe and Trinidad and Tobago, to name just a few, are in much the same position. This makes retiring abroad a bit of a lottery State Pension-wise as, out of the 200 or so countries in the world, only around forty or so have arrangements with the UK allowing State Pensions to be uprated. So, if like me you dream of heading for the sun one day, you might want to keep your eye on this kind of stuff. It’s doubly important for advisers whose clients get itchy feet late in life to understand these quirks too.
Annette Carson has had a pretty good go at getting what she sees as an injustice put right and took the Government all the way to a House of Lords appeal. But her case was rejected. She’s a bit peeved because she paid her full National Insurance Contributions the same as anyone else and she claims she’s therefore entitled to get the same pension as anyone else who did that. I agree with her, but the judges didn’t, saying her claim was ‘unjustified’.
The way it works is this. If you move to a country like South Africa and you are in receipt of the Basic State Pension then you forego any future annual increases to that pension. At the moment State Pensions are uprated in line with increases in prices in the UK. In an extreme case, someone who emigrated in 1971 could still be getting just £6 a week as a Basic State Pension. In Mrs Carson’s case, her pension is still pegged to £67.50 a week, the 2000/2001 level.
The countries where we have full bilateral agreements, and it’s therefore safer to retire to, are the EU Member States, some Commonwealth countries and a random selection of others around the world, including the United States. I’ve listed below all of these countries in case anyone ever asks you and I’ve also listed the values of the full Basic State Pension since 1971. That table itself shows how the loss of even the relatively low level of increase that the Basic State Pension gets can have the devastating affect of making your pension sort of accelerate backwards as you get older. That should serve as a bit of an eye-opener for people buying level annuities with their private pension savings too I think…..
Countries where we have full social security agreements:
EU Member States: Austria; Belgium; Cyprus; Czech Republic; Denmark; Estonia; Finland; France; Germany; Greece; Hungary; Ireland; Italy; Latvia, Lithuania; Luxembourg; Malta; Netherlands; Poland; Portugal; Spain; Sweden; Slovakia; Slovenia.
Commonwealth Countries: Alderney; Barbados; Bermuda; Canada; Gibraltar; Guernsey; Isle of Man; Jamaica; Jersey; Mauritius; New Zealand and Sark.
Others: Iceland; Israel; Liechtenstein; Norway; Philippines; Switzerland; Turkey; the United States of America; and the countries that formed the former Yugoslavia .
Source: DWP website
Historic weekly levels of the Basic State Pension:
Year Single person (£) Married couple (£)
1971 6.00 9.70
1972 6.75 10.90
1973 7.75 12.50
1974 10.00 16.00
1975 11.60 18.50
1975* 13.30 21.50
1976 15.30 24.50
1977 17.50 28.00
1978 19.50 31.20
1979 23.30 37.30
1980 27.15 43.45
1981 29.60 47.35
1982 32.85 52.55
1983 34.05 54.50
1984 35.80 57.30
1985 38.30 61.30
1986 38.70 61.95
1987 39.50 63.25
1988 41.15 65.90
1989 43.60 69.80
1990 46.90 75.10
1991 52.00 83.25
1992 54.15 86.70
1993 56.10 89.80
1994 57.60 92.10
1995 58.85 94.10
1996 61.15 97.75
1997 62.45 99.80
1998 64.70 103.40
1999 66.75 106.70
2000 67.50 107.90
2001 72.50 115.90
2002 75.50 120.70
2003 77.45 123.80
2004 79.60 127.25
2005 82.05 131.20
*Nov
Steve Bee
1 June 2005
Any research and analysis included has been provided by us for our own purposes and the results of it are being made available only incidentally.
