'Unjust' pensions policy challenged

The case could have ramifications for many

By Sarah Toyne BBC News Online personal finance reporter

Thousands of British pensioners who have retired abroad face "considerable hardship", "resentment" and "feel a burning sense of injustice", a High Court hearing has been told.

Frozen pensions

Australia

Canada

Hong Kong

South Africa

Zimbabwe

New Zealand

Trinidad & Tobago

Annette Carson, 61, a British pensioner living in South Africa, is challenging the government's refusal to uprate her pension each year.

Richard Drabble, QC, on behalf of Mrs Carson, said that 430,000 pensioners were facing a similar situation over the UK Government's refusal to increase their pensions each year.

According to figures submitted to the court, about 330,000 British expat pensioners have their pensions increased each year, otherwise known as "uprating", but the remainder do not.

Mr Drabble said that Mrs Carson faced substantial financial hardship as a result of the policy, which means that she will receive the same pension throughout her life - fixed at the rate when she first retired.

'Unique' policy

Mrs Carson, a divorced writer, moved to South Africa in the late 1980s.

She continued paying National Insurance while living in South Africa.

She currently receives £103.62 per week, including a basic pension of £67.50, an additional sum of £32.17 and a graduated pension of £3.95.

Mr Drabble said: "The policy of not paying an inflation-proof retirement pension is unique.

"No other state, so far as the evidence reveals, pays a contributory retirement pension abroad on anything other than its contemporary retirement rate."

Human rights

Mrs Carson is challenging the UK Government's refusal to uprate, citing Article 1, Protocol 1 of the Human Rights Convention.

Uprated pensions

Austria

Barbados

France

USA

Switzerland

Greece

She claims she is also being discriminated against, on grounds of residence, contrary to Article 14.

The government has said it would be too expensive to uprate pensions, a move that could cost about £330m more.

Sitting in court on Monday were officials from the Australian and Canadian Governments.

There are 220,000 British pensioners living in Australia, and the Australian Government was given limited leave to intervene in Monday's hearing following an application in March.

The Canadian Government has voiced support for Mrs Carson, and sent two officials to observe the case.

Deception denied

James Eadie, for the Department for Work and Pensions, said that Mrs Carson had been notified that she would not receive an uprated pension.

He cited a number of instances where she should have received information outlining the government's policy on pensioners retiring abroad.

He said that "she had not been deceived", and that the allegation that she was not aware of the government's policy was "misconceived".

"By 1994, she had received this leaflet, which expressly says she is not going to receive the uprate," he said.

He added that she would have signed a form acknowledging that she had read the conditions.

Mr Eadie said that while the government supported her right to a pension, the Human Rights Convention did not mean "payment of a particular amount".

He said that there was a right in law, but it was "conditional".

The hearing continues.