Opposition leader David Cameron will consider whether to stop the
fixing of frozen pensions for British expats, mainly in old Commonwealth countries, such as Australia, Canada and New Zealand, before the next election.
A letter from the Conservative leader’s office to British expats Barbara and Nick Steward who have retired to Canada, stated, "As has been made very evident recently, the Prime Minister has left our nation's finances ill prepared for the economic difficulties we now face.
“As a result we will have to make some tough decisions about spending in the current economic climate. Conservatives are therefore unable to make the commitment to amend the rules at present.
“Nonetheless the issue will be considered as part of the Conservative's policy review process prior to the next election."
While in the UK pensions increase each year, in the affected countries they are fixed at the rate they were when the retirees emigrated; in real terms they actually decrease annually as prices go up.
With some 530,000 British pensioners affected globally, the protests to bring expat pensions in line with current inflation could make a big difference to those who receive them.
“It is grossly unfair that we have paid into our pensions, like it or not, and then be denied any inflation-linked increases because we moved to one of the UK's old colonies,” says Barbara Steward.
“Canada has 150,000 people receiving the British pension, some of them now in severe financial circumstances through no fault of their own,” she added.
“We have also tried to get the Conservative government in Canada to contact David Cameron to try and encourage some action – this does not seem to be forthcoming, so the next move will be to write to the Leader of the NDP Party in Canada.”
The question of frozen pensions has been raised in the House of Commons. The current British Government claims the cost of unfreezing the government pension would be too high, estimating a cost in 2007-08 of approximately £3 billion to bring frozen rate pensions up to current levels and to pay all the arrears.
It says it would cost around £420 million if arrears were not paid plus ongoing costs which will rise annually.