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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.