There was an article in one of Thailand’s main newspapers last month about what it described as the UK government’s attack on foreigners receiving a British state pension while living abroad.
Under the headline Thai widows to lose their pensions, attention was drawn to the 2,000 or so women living in Thailand who had British husbands and who would henceforth no longer be able to receive a state pension based on their husband’s national insurance record or a widow’s pension on the same basis in the event of his death.
The article did make it clear that those women already in receipt of a UK state pension or those whose husband died before the cut-off date last month still fall under the old rules and would continue to benefit but that Thai women now contemplating marriage to a British national would not be able to inherit any of their husband’s state pension rights.
This is because the introduction of the new single-tier state pension with effect from April 6, 2016 has brought about a change in the former arrangements which allowed a person in a marriage or civil partnership to claim the state pension based on the national insurance (NI) record of their spouse. Since then, only contributions made into the new system by the individual herself (or himself) can normally count towards building up an entitlement.
This is not a nationality issue. The changes that will stop pensioners in Bangkok from getting a weekly cheque from Whitehall will have the same effect on their counterparts living in Birmingham, or anywhere else for that matter.
What about the UK?
So what about the people in this country? It is certainly true that the changes will directly affect people who currently live here in Britain, and may have done so all their lives. How much of a problem might this turn out to be over the longer term?
The government seems to think that with changing lifestyles and the continuing availability of NI credits most women are now capable of building up their own state pension entitlements and do not need to rely on claiming a pension from their husband’s record.
That may be broadly correct but being seen to deprive a widow of a pension is always going to be a sensitive issue and could in my view generate some very bad publicity for the government as individual cases of hardship come to light.
For example, under the pre-6 April 2016 rules a pensioner couple where the man has a full basic state pension and his wife little or no pension in her own right is guaranteed a total pension income of £190.80 per week (£119.30 + £71.50).
Under the single-tier the man has a pension of £155.65 a week and unless his wife can meet the new minimum of ten NI qualifying years in her own right, she will get nothing. Effectively they are likely to be over £25 a week worse off.
And in the event of the husband pre-deceasing his wife, under the old system the widow inherits the whole of his £119.30 pension, plus half of any SERPS he may have. Under the new system, the widow gets nothing and could be left penniless for the rest of her life.
So much for the “new, more generous” state pension which, it is claimed, is better for women and the low paid. I can see the lurid headlines now, not in the Thai press but in a British tabloid.
Malcolm McLean is a senior consultant at Barnett Waddingham
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