British pension: good for a whinge

WHEN retirement time comes, British migrants in Australia are finding they have more than ever to complain about: they get only a fraction of the generous pensions they would have enjoyed had they stayed home.

By InvestSMART · 17 Apr 2012

By InvestSMART ·
17 Apr 2012

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Foreign Minister Bob Carr is about to join a long line of Australian politicians complaining that British migrants to Australia do not have pensions indexed to inflation, yet those who go to most of Europe, the US, Israel, the Philippines, Turkey and some Caribbean islands are fully indexed.

Senator Carr has announced he will raise the issue with his British counterpart, William Hague, when they meet during his visit to Britain.

Unlike in Australia, British pensions are not means tested, so everyone gets one based on the amount of contributions the person has made. And when people migrate to a country such as Australia, Canada, New Zealand or most other parts of Britain's former empire they get only the monetary amount they are entitled to when they retire and this amount does not change.

Of about 250,000 British pensioners in Australia, about half have their British pensions topped up by CentreLink. Australians who qualify for a pension and live in Britain, get their full Australian pension.

The founder and chairman of the pressure group British Pensions in Australia, Chris Tilley, said the reason for Britain's different approaches to different countries was unclear and removing the inconsistencies and indexing all pensions had been recommended by reports to its Parliament.

'They are the only country that does this. If someone goes to live in Jamaica or Barbados they get the full pension, but not if they go to any of the other islands of the Caribbean. There are lots of migrants from the West Indies who would love to return to their warm island when they retire, if they could get an indexed British pension, which would relieve Britain of other costs to these people including the National Health."

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Frequently Asked Questions about this Article…

Why are British migrants in Australia complaining about their British pensions?

Many British migrants in Australia find their UK state pensions are not indexed to inflation for people living in Australia, so they receive only the fixed monetary amount they were entitled to at retirement rather than ongoing increases. That means their pension income can fall behind the cost of living, prompting complaints.

Which countries do get fully indexed British pensions overseas?

According to the article, people who move to most of Europe, the United States, Israel, the Philippines, Turkey and some Caribbean islands receive fully indexed British pensions. The article specifically notes Jamaica and Barbados as examples of places where migrants get the full pension.

Are British state pensions means‑tested like Australia’s pension?

No. British state pensions are not means‑tested — everyone receives a pension based on the amount of contributions they made. This differs from Australia, where pensions can be subject to means testing.

What happens to British pensions if someone migrates to Australia, Canada or New Zealand?

People who migrate to countries such as Australia, Canada or New Zealand receive only the monetary amount they are entitled to when they retire, and that amount does not change — it is not uprated for inflation while they live in those countries.

How many British pensioners live in Australia and do they get help from Centrelink?

The article says there are about 250,000 British pensioners in Australia, and roughly half of them have their British pensions topped up by Centrelink to help meet living costs.

Do Australians who live in Britain get their full Australian pension?

Yes. The article states that Australians who qualify for an Australian pension and live in Britain receive their full Australian pension.

What are pension advocates asking the UK government to change?

Pressure group British Pensions in Australia, led by Chris Tilley, wants the UK to remove inconsistencies in how pensions are treated overseas and to index all pensions. He notes reports to Parliament have recommended full indexation and questions why the UK treats different countries differently.

Is the Australian government taking any action on UK pension indexation for migrants?

Yes. The article reports that Foreign Minister Bob Carr planned to raise the issue with his British counterpart William Hague during a visit to Britain, joining other Australian politicians in lobbying for indexed pensions for British migrants in Australia.