You think Ponzi schemes in Thailand are an outrage?
Welcome to the UK state pension scam!
Past letter writers have pointed out that the UK state pension, payable to those who have made annual National Insurance payments throughout their working lives, is not index-linked if one is resident in one of many countries, including Thailand. This means that the real value diminishes year by year. My letters to PM Theresa May and Secretary of State Damian Green complaining about this injustice have produced smug responses from low-grade clerks, who refer to the European Court of Human Rights no less than six times. They express no shame whatsoever that groups of pensioners have felt compelled to take the UK government to the European Court of Human Rights in 2008 and 2009, and lost both times.
This issue is not one of human rights, but one of contractual and moral obligation. But now we learn that the state pension is not funded by the insurance payments we have been making for decades, but is financed out of current revenue, and has become a huge looming liability – a Ponzi scheme in all but name. To tackle this liability, the panicked government is now considering raising the retirement age and removing the “triple-lock” index-link for UK residents. In other words, it is unilaterally breaking the contract.
But here is the bombshell. The UK Treasury has recently stated that it does NOT view the state pension as a contractual obligation but as a “benefit”, and is now contemplating means-testing of applicants – both income and capital. This is unconscionable. If a private insurer were to treat its policyholders with the utter contempt that UK National Insurance has shown, it would be taken to court and closed down. As an expat who has worked hard all my life, who has written out an insurance cheque to the government for several hundred pounds annually since 1978, who has overpaid by several years because they reduced the number of qualifying payments in 2008 (with NO refund), who still pays UK tax, who never makes any claims on public services, and who has to pay all medical expenses out of his own pocket, I regard it as an outrageous insult to be classed as a “benefit recipient”.
My advice to UK retirees in Thailand is to do as I have done.
Import as much of your wealth over here as you can, and put it in the name of a trustworthy spouse or Thai business. Spend, spend, spend, thereby beating the means test and reducing your inheritance tax liability. But don’t overdo it – if you die within seven years, the UK government will get the last laugh.