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Strasbourg to rule on index-linked pensions for expats

15 March 2010

The long-running legal battle by around half a million British pensioners who retired abroad against a government decision to freeze their pensions will reach its final stage in the European Court of Human Rights tomorrow.

The Strasbourg judges will hear the test case of 13 British nationals who have worked and paid national insurance in the UK but have retired in South Africa, Australia and Canada.

Unlike other British pensioners who have retired to countries with which Britain has reciprocal social security arrangements, such as the US or members states of the EU, their pensions are not indexed linked but frozen as at the date they were first drawn.

The case is an appeal from a decision by the court’s fourth section, which held in November 2008 that Britain’s refusal to up-rate the expats’ pensions in line with inflation was discriminatory.

It ruled by a 6-1 majority in Carson and Ors v United Kingdom that there had been no breach of the general prohibition of discrimination in article 14 ECHR taken together with protocol 1 on the protection of property.

The court did not find it necessary to examine whether the complaint involved a breach of the right to family life and privacy under article 8.

On 6 April 2009, the case was referred to the Grand Chamber at the applicants’ request and a Grand Chamber hearing was held on 2 September 2009.

The case was started by writer Annette Carson, who moved to South Africa while continuing to make full contributions to her UK state pension.

On her retirement in September 2000, she was entitled to a basic state pension of £67.50 a week.

In 2005 the House of Lords rejected her claim, with Lord Hoffmann saying there was “nothing unfair or irrational about according different treatment to people who live abroad”.

The system was not intended to maintain the living standards of inhabitants of other countries, he said, even if they had past connections with the UK.

The current weekly state pension in £95.25.

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