Frozen Pension Policy


by Yasmin Qureshi MP

Barely a week goes by without another story in the press about changes to the government’s pension policies. And yet the one issue that the government seems unwilling to address is its archaic and unjust frozen pension policy.


Given the lack of government information about this issue, you could be forgiven for not being aware of its existence. Yet as an MP who receives countless letters from those affected, I feel strongly that this is not a situation the government can continue to ignore.

A ‘frozen pension’ means that the state pension received at retirement age remains at the same amount for the rest of retirement, without any annual inflationary uprating. This means that the real term value of the pensions of those affected declines throughout their lifetime. As time goes on they become progressively worse off and in many cases we hear of people living off a pittance each week – which is totally unacceptable.


560,000 British pensioners currently have their pensions frozen because they have chosen to spend their retirement in one of around 120 countries around the world, mainly in the countries of the Commonwealth. The impact is loss of independence, loneliness and even poverty, where pensioners are prevented from living with family overseas.


What makes this policy most outrageous is that it is not applied consistently. Move to anywhere in Europe or the US for example, and your pension will be uprated as it would be had you stayed in the UK, but move to Pakistan, India or Bangladesh and find your pension frozen.


This is even more ironic when you consider the values of inclusiveness and ‘implacable opposition to all forms of discrimination’ espoused by the Commonwealth Charter on Equality. Indeed, the UK is the only country in the OECD that discriminates against certain pensioners because of their choice of country in retirement.


Currently the largest proportion of frozen pensioners live in Canada and Australia, but this is going to change. Migration to these countries has slowed and increasingly those of us from black and Asian communities, who have lived and worked in the UK for decades, are choosing to retire to our countries of birth in the Caribbean, Africa or south Asia.


The case of Abhik Bonnerjee, 72, is a prime example. He returned to Kolkata after working in the UK for nearly 40 years to be with his two sons. He is now living on a state pension 24% lower than if he had stayed in the UK. Abhik, who paid national insurance contributions and taxes for nearly four decades is now being forced to seriously consider returning to Britain as the financial strain becomes too large to bear. Ironically, by doing so he would cost the UK government an average of £3,000 per year in healthcare and other benefits – this simply makes no sense.


And this is far from an isolated example. Research commissioned by the International Consortium of British Pensioners (ICBP), who are campaigning for the unfreezing of pensions, asked those from a Black, Asian and Minority Ethnic background about their retirement plans and found that more than a third (38%) are considering returning to their country of cultural origin, of which one in nine said they will definitely do so. Shockingly, nearly two thirds (61%) were unaware of the frozen pension policy and the fact they would be affected, with nearly half stating it would influence their decision.


With more than two million people of a BAME background approaching retirement age in the UK, this is no small issue and one I certainly think is worthy of more attention than it currently receives.


This is an issue of fairness and I can only hope that common sense prevails and that the government overturns this ridiculous policy once and for all.



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