A 92-year-old Scottish pensioner who lives in Halifax says it’s a “disgrace” that United Kingdom state pensions don’t receive annual increases in Canada and many other countries.
Depending on where a U.K. expatriate settles, the pension may be indexed, leading to increases in value each year to keep up with the rising cost of living.
Some of the countries where the pensions are indexed include most of Europe, the U.S., the Philippines and Barbados, according to a U.K. state pension website.
However, Canada, New Zealand, Australia and South Africa, among others, are some of the prominent Commonwealth countries where the pensions don’t see an annual bump.
People can begin collecting the pension at 65.
“How could the British people put up with this? It’s a violation of contract,” said Robert Rodger, 92, a retired Dalhousie University professor who has been collecting the pension since 1991.
144,000 U.K. pensioners in Canada affected
Every 28 days, Rodger gets about 117 pounds — around $200 Cdn — although the Canadian value fluctuates because of currency changes.
The frozen pension affects about 144,000 U.K. pensioners living in Canada, says the Canadian Alliance of British Pensioners, a group advocating for indexed pensions.
With his pension from Dalhousie, the money from the U.K. pension won’t make or break Rodger. For him, the issue is fairness.
Rodger’s U.K. pension stems from about 15 years serving in the Second World War, post-war military service and teaching, before he left Scotland to work in Australia. He came to Canada in 1968.
‘It doesn’t make sense’
Rodger’s war service included being in charge of a German PoW camp in 1947 and 1948. One of the ironies of Rodger’s situation is that if he had settled in Germany, his homeland’s wartime enemy, his U.K. pension would be indexed.
“Psychologically, it doesn’t make sense,” he said.
He adds that if he had settled in Japan — another Second World War antagonist — the pension would not be indexed.
Rodger attributes the lack of indexation to “political nits” not willing to take action.
Why U.K. pensions are indexed in some places
Expats in Gibraltar, Switzerland and members of the European Economic Area, which covers most of Europe, receive indexed pensions.
If a country has a social security agreement with the U.K., this likely means the pensions will be indexed. However, there are two countries that have these agreements with the U.K., but are exceptions to the indexing rule — Canada and New Zealand.
In a statement, the U.K.’s Department for Work and Pensions said its policy on pension indexing has remained consistent for about 70 years.
“If all U.K. state pensions paid overseas were up-rated to the level payable in the U.K. this would cost an extra £0.5 billion [$840 million Cdn] a year,” said the statement.
Canadian government says it’s lobbying for change
The Canadian government says it has proposed that the U.K. and Canada sign a comprehensive social security agreement that would allow for indexation.
“The U.K. has declined these overtures and maintains its long-standing position that it cannot consider the indexation of U.K. pensions paid into Canada,” said Amélie Maisonneuve, a spokesperson for Employment and Social Development Canada, in a statement to CBC News.
She said even without a bilateral agreement, the U.K. could still make it law that the pensions be indexed.
Is the CPP indexed in foreign countries?
For Canada’s public pensions, namely the Old Age Security program and the Canada Pension Plan, these are indexed regardless of an expat’s country of residence.
Maisonneuve said the Canadian government will continue to raise the issue of non-indexation of the pensions with U.K. officials.