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Webb denies talk of DWP unfreezing expat pensions
| Published: | 13 Sep at 6 PM |
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UK pensions minister Steve Webb has denied rumours that the government is set to unfreeze British expats’ pensions.
Speculation began after Australian minister Jenny Macklin said last week that she had talked about reforming the policy of British state pensions being frozen from when expats quit the UK with Iain Duncan Smith, the British pensions secretary. She said that Duncan Smith had assured her he would discuss whether a reform was possible with British expats residing in Australia and the Australian government.
But Webb yesterday refuted these claims insisted that the cost of unfreezing the pensions would be somewhere in the region of £655m per year. He went on to say that they are of the opinion that this is considerably more than any hypothetical savings resulting from new migration behaviour which could result from pensions being unfrozen.
He went on to say that he feels an Oxford Economics report which claimed that unfreezing expat pensions would lead to more people emigrating and, therefore, reduce the healthcare service costs, resulting in more saving, is flawed on many grounds. He explained that it assumes that uprating pensions would lead to further savings, but it fails to take into account that any savings might not be seen for two decades, while the government would be paying out up front.
Speculation began after Australian minister Jenny Macklin said last week that she had talked about reforming the policy of British state pensions being frozen from when expats quit the UK with Iain Duncan Smith, the British pensions secretary. She said that Duncan Smith had assured her he would discuss whether a reform was possible with British expats residing in Australia and the Australian government.
But Webb yesterday refuted these claims insisted that the cost of unfreezing the pensions would be somewhere in the region of £655m per year. He went on to say that they are of the opinion that this is considerably more than any hypothetical savings resulting from new migration behaviour which could result from pensions being unfrozen.
He went on to say that he feels an Oxford Economics report which claimed that unfreezing expat pensions would lead to more people emigrating and, therefore, reduce the healthcare service costs, resulting in more saving, is flawed on many grounds. He explained that it assumes that uprating pensions would lead to further savings, but it fails to take into account that any savings might not be seen for two decades, while the government would be paying out up front.
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