It’s been more than eight years since he moved to Canada from the United Kingdom and, like many expatriates from the UK, Mike Pizzani continues to pay into his British pension.
However, unlike some British expats living around the world, his pension will be frozen when he accesses it upon his retirement because he lives in Canada.
Pizzani, who lives in Okotoks and continues to work in the country he now calls home, was part of a standing-room-only crowd at a meeting held by the Canadian Association of British Pensioners (CABP) at the Foothills Centennial Centre on March 6.
Under UK law, the pensions of people living in Canada and several other countries are not tied to inflation and will not increase over time. This is the case primarily in the “ex-colonies” – countries like Canada, Australia, New Zealand or South Africa. However, those living in other countries, including the U.S., will get their pensions indexed to inflation.
The CABP is fighting to get the UK government to unfreeze the pensions of people living in Canada.
It’s a move Pizzani said would be a big help not only to himself but to many others as well.
“It would make a big difference if we can get the pension we paid in for and if it’s indexed it will take pressure off Canadian residents,” he said.
Calgarian John Laycock said people who fought for and worked to build the United Kingdom should be treated fairly in their retirement years.
“It seems discriminatory, it really should be evaluated,” he said.
Laycock left the UK at age 32 after working in the country for 16 years and he will turn 63 next month.
He said he only expects to get 20 per cent of his pension, about 65 pounds, or $102 in Canadian funds, per week. He said the pension won’t be worth much if it doesn’t increase with inflation.
While it won’t be his primary source of retirement income, he said this isn’t really the issue – it’s a matter of fairness.
CABP representative Sheila Telford agreed it is matter of ensuring a level playing field.
“It is completely unjust, completely unjust and the older you are the more unjust it is,” she said.
According to Telford, there are about 500,000 people living outside of the UK with frozen pensions, about 158,000 of who are in Canada. At the same time, about 500,000 people who are living outside the UK have their pensions rise with inflation.
Telford said there are 247,000 expatriates between the ages of 46 and 64 and it’s expected the number of British expatriates living in Canada is expected to grow.
“So we have all these people who will become pensioners,” said Telford.
She said the British government has not dealt with the issue because of how much it would cost to put everyone on a level playing field.
She said older people in their 80s and 90s are hurt the most by the policy, including many who fought for the UK in World War II and worked in the country for many years afterwards.
She said there are some who only receive between seven to 10 pounds a week, or $11.05 to $15.78 Canadian. She said they should be getting 102 pounds per week, or $161 in Canadian funds.
“(They) are on a diminishing income every year, because their British state pension, into which they paid full contributions, is going down every year because of inflation,” she said.
She added the Canadian government has been supportive and has helped to lobby the British government over the issue. If pensions were unfrozen, it’s estimated the move would provide a $300 million benefit to the Canadian economy through a rising standard of living to pensioners and a reduction in the Supplemental Income Benefits paid to those individuals currently on lower incomes as a result of their pensions being frozen.
The association is also trying to raise awareness among younger expatriates who don’t know they can still apply for a British pension or that they have an opportunity to increase their pensions.
Telford said anyone who has contributed to a British pension for 30 years is eligible to receive it. She said a lot of Canadians who lived and worked in the UK are also eligible for a British pension.
Since an amendment to pension legislation in the United Kingdom in 2007 anyone who has worked in the UK for even one year, paying the national insurance contributions and reaching British retirement age after April 2010 is entitled to a British pension of 1/30 of the final defined benefit pension. If they have worked three years in the UK they are entitled to make up the missing years’ contributions to increase their pension.
Telford said British pensions are getting more generous and younger expatriates could do well to take advantage of it.
