British retirees watch 'frozen' pensions disappear, campaigners hope Brexit brings change
By social affairs correspondent Norman HermantUpdated Thu Jan 05 11:40:13 EST 2017
Video 5:42 Jim Tilley hopes Brexit could see his frozen pensions increase in value.ABC News
For British pensioners who retire abroad, the world is split in two. Countries where UK pensions are indexed — where they rise automatically every year to keep up with inflation — and countries where they are not.
Australia is on the wrong side of that divide. UK pensions for British retirees living here are not "uprated", or indexed. British retirees living in Australia have UK pensions that never increase in value.
Every year, as inflation rises, their buying power shrinks.
"I think this is absolutely appalling," said Jim Tilley, chairman of British Pensions in Australia.
"It is not the Britain in which I was brought up. It is not the Britain of fairness, of justice, of equality."
What particularly upsets Mr Tilley is the different treatment British pensioners receive based on which country they retire in.
"If they go to America, or if they go to Israel, or if they go to the Philippines ... all of Europe, they get their pensions indexed. But if they come out to Australia, Canada ... and New Zealand and South Africa, then their pensions are frozen," he said.
It has been this way for decades but Mr Tilley and other campaigners are looking to Brexit for change.
They believe the negotiations involved in the UK's departure from the European Union could provide the impetus to finally make all UK pensions equal.
About 1.2 millionBritish pensioners live abroad. Of those, 550,000live in countries where pensions are frozen.
External link: See where people with frozen British pensions live.
Source: All-Party Parliamentary Group on British Frosen Pensions
Most of those are in Australia (250,000), Canada (150,000), and New Zealand (50,000).
The situation often leads to absurd examples — like that of 96-year-old Delysia Willmott.
Ms Delysia moved to Australia in 1978 to be near her daughter. At the time her pension was 17 pounds per week.
Thirty-nine years later, her UK pension is still17 pounds per week. Had she retired in Europe, or the US, her pension today would be 119 pounds per week.
"I think she's very upset about it," said her daughter, Valerie Rumball.
"It is grossly, grossly unfair."
Photo Valerie Rumball's mother's pension remains at 17 pounds per week.
ABC News: Norman Hermant
Many British retirees have no idea their pensions will be frozen when they move to Australia. That was the case for Eric and Noreen Rogers.
Their retirement began comfortably in Cyprus in 1996, where Mr Rogers' British pension was fully indexed.
They came to Australia in 2002 to join their daughters, who had both moved here.
"We've come here, and then — cut off. It's a shock, a total shock," Ms Rogers said about finding out her husband's pension would be frozen.
"The value of your pension's reducing all the time, its' buying power," her husband added.
"You suffer for that. You have to make sacrifices."
Photo British citizens Eric and Noreen Rogers said the buying power of their pension was reducing all the time.
ABC News: Norman Hermant
Even favourable exchange rates versus the Australian dollar fail to make a real impact if the value of pension is gradually eaten away by inflation.
"I think privately, United Kingdom ministers recognise the injustice," said British MP Sir Roger Gale, chairman of the All-Party Parliamentary Group on Frozen British Pensions.
Britain's Department for Work and Pensions has consistently argued the cost for full indexing would be too great. It estimates it could cost 590 million pounds.
Critics say a more limited approach — starting indexing now, without any retrospective measures — would cost much less.
But after years of stagnation, there may now be an opportunity for movement.
"This will have to be ... part of any Brexit negotiations," Sir Roger said.
Photo British MP Sir Roger Gale said Brexit provided an opportunity for policy change.
ABC News: Emily Bryan
When post-EU Britain negotiates new trade deals with countries like Australia and Canada, he said they must send Britain a clear message: "As part of any trade deal that we do with you following the leaving of the European Union, we want this issue settled. Because settled it must be."
British Pensions in Australia estimates frozen UK pensions cost Australia more than $220 million a year.
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That is because many British retirees receive partial pensions from both the UK and Australia. As the relative value of UK pensions decreases, pension payments from Australia rise to fill the gap.
A spokesperson for Australia's Department of Foreign Affairs and Trade said in a statement: "Successive Australian governments have raised the issue of pension indexation with UK ministers, noting that the policy is discriminatory and unjust. However, successive UK governments have made clear they see no scope to change the policy."
For Mr Tilley, forcing a change to the policy has been an almost all consuming quest for the past 15 years. Together with campaigners in Canada and the UK, they've seen court challenges come and go, without success. He has no plans to stop fighting.
"I'm not going to give in," he said.
"I don't want to give in because it's not in my nature to give in."