The Canadian Experience
UK “Frozen” Pensioners Living In Canada
158,000 British expatriates living in Canada are receiving some level of UK state pension from the period they worked, paid taxes, served their country, and contributed to the mandatory state pension plan (National Insurance fund) whilst residing in the UK.
We believe that there are thousands of others who have an entitlement, based on their contributions whilst living in the UK, but who may not be aware of it and have not applied.
Those who have claimed their pensions find them frozen from the date they received their first cheque in Canada and they have never received any uprating. The same situation exists for a total of some 548,000 frozen pensioners world-wide. Many of them, in the two decades after the war, were aggressively encouraged to emigrate to Commonwealth countries by the British Government.
588,000 other pensioners, who contributed in exactly the same way, but happen to live in the EU, USA, Israel, Bosnia-Herzegovina, amongst other countries, receive the same annual uprating as UK-resident pensioners.
Although you may not be in great financial difficulty personally, there are many non-uprated pensioners in Canada who are. Even more desperate are those non-uprated pensioners who are living in countries without any social net such as those in South Africa and Zimbabwe.
The Impact On A Pensioner’s Income
A couple who decided to move to Canada to be near their children, following his retirement on a full basic pension in Britain in 1989, had become a burden on the families by the time they reached their mid-eighties. The children that they came to Canada to be close to are now assisting mum and dad to make ends meet because their pensions are frozen. By 2009, pension freezing had short-changed this couple more than £49,000 ($86,000 using current exchange rates) since retirement. If they had lived 80 km to the south, in the USA, their pension would not have been frozen!
It is reprehensible to treat these individuals in such a way. No matter how financially secure a frozen pensioner, a loss of such a quantity of money must have an adverse effect on one’s standard of living.
Some of the important and valuable benefits to Canada and all Canadian Taxpayers that would result from ending pension freezing would be:
- Loss of more than $350,000,000 to Canadian economy (2011) estimate
- GIS payment reduction $27,000,000
- Loss of Pension inflow from UK to Canada $284,000,000
- Loss of $ 42,600 income tax on the $284,000,000 (average 15%)
- Frozen pensioners will be better able to afford the standard of life they should have expected in their retirement years without becoming a burden on their families.
- A reduction in Supplemental Income Benefits paid to those individuals currently on lower incomes as a result of their pensions being frozen.