Luckily today’s ruling wont effect UK pensioners living here in Spain as agreements are in place to ensure that State pensions that are paid to expats in Spain rise in line with inflation each year.

The expatriate pensioners say they have been fighting “tooth and nail” against the UK government in an eight-year court battle.

Pensioners who have moved abroad want their UK state pensions to rise in line with inflation each year.

Inflation-proofing only applies to UK pensioners who live in the European Economic Area or in 15 other countries, but not in some Commonwealth states.

Entitlement

John Markham, a pensioner living in Canada, said: “There is an image of people living well in the sunshine – but there are plenty of cases of real hardship.”

The applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension

European Court of Human Rights

He said the decision was the end of the legal road, but they wanted to take the case to the “court of public opinion”.

He told the BBC News website that they would take 48 hours to consider the decision.

The campaigners argue that they paid into the pensions system when they were working and are entitled to the same benefits as those who remained in the UK.

For the oldest overseas pensioners, who retired in the early 1970s, the pension can be as low as £6 a week.

Those who retired in the early 1980s are left on about £30 a week, and those who retired in the early 1990s get about £50 a week.

The current basic state pension is £95.25 a week.

‘First priority’

There are more than a million UK pensioners living overseas – with about half of them affected by the pensions freeze.

South Africa resident Annette Carson was among those who started the case

If pensioners have moved to countries with a reciprocal arrangement – such as in the European Union or the United States – then they receive pension increases.

But if pensioners have emigrated to countries without any such agreement – such as Australia, Canada and South Africa – their pensions have been frozen at the level of when they moved overseas.

The Department for Work and Pensions welcomed the ruling and said the department’s first responsibility was to support pensioners in the UK.

“We note that the court has found in favour of the government. We do not therefore plan to make any changes to the current arrangements, which allow for the exportability and up rating of UK state pensions,” a department spokesman said.

“We will, nonetheless, study the terms of the judgment carefully to ensure that we continue to comply with our obligations under the terms of the European Convention on Human Rights.”

The department has said that pensioners who chose to move to a country without a reciprocal pensions arrangement would have been aware of what it would mean for their state pension.

Link

The case has seen a series of courts reject the arguments of pensioners including Annette Carson, who moved to South Africa in 1990.

After emigrating, she continued to make full contributions to her UK state pension and, on retirement in 2000, began to receive pension payments. But since then, the UK authorities have frozen the level of payments at £67.50 a week.

Judges at the European Court of Human Rights were the latest to declare that National Insurance contributions did not have an “exclusive link” to retirement pensions.

“As non-residents, the applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension,” a statement from the court said.

The court said that it was hard to draw any genuine comparison with the position of pensioners living elsewhere.

The European Court of Human Rights rejected an appeal from a group of pensioners by an 11 to 6 majority.

Via BBC

Despite recent reports that Spain itself was feeling “bullish” about the recession, it seems that expats living in Spain would do well to not get their hopes up and to continue to expect the recession to continue well into 2010.

The Spanish economy is struggling to catch up with the European monetary union.

Many expats living in Spain moved out to enjoy their retirement in the sun, relaxing and enjoying their hard earned pensions. I suspect that for many the concept of a offshore account never really occurred to them, perceiving it to be something for the rich or dodgy.

However a growing number of British expats in Spain are moving their pensions offshore after reform in 2006 allowed long-term expatriates to set up the Qualifying Registered Overseas Pension Scheme (QROPS).

Not good news for expats and regular travelers in Spain who travel tourist class with Iberia as they have announced they will be charging for second suitcases checked into the hold from 1st March 2010, in an attempt to lighten the planes, save fuel costs and speed up operations ….. no mention of making more money or reducing costs to passengers you note!

Passengers in Business and other classes are not affected as luggage charges there are already up to 30 kilos in one bag and 46 kilos per passenger in two bags.

One issue high on every expats priority list when moving to live in Spain, when they have children, is the quality of the education that they will receive so the news that a new scheme will allow overseas schools to be accredited by the British Government for the first time will surely be pleaseing to note.

Diana Johnson, Parliamentary Under Secretary of State for Schools, said: “We believe these arrangements will allow parents access to good quality, comparable and consistent school inspection reports that will set out the extent to which participating British institutions overseas measure up to a rigorous set of standards rooted in the British education system.

For many expats living in Spain it appears that the distressed property market, high levels of unemployment in Spain, and the weak pound have combined to shatter many a dream of enjoying the sunshine, culture and traditions of Spain. A recent survey reported that almost 75% of British expats in Spain are considering moving back to the UK.

British property owners have been hit particulary hard with rental yeilds dropping, and harder to come by, jobs harder to find, and costs going up in real terms for many pensioners.

Despite the current exchange rate which has made Spain seem much more expensive for many expats living in Spain, there is some good, if not surprising, news which despite Which? saying recently that Spain may no longer be such great value, shows that many goods in Spain are cheaper than their equivalent in the UK.

On a typical monthly shop expats in Spain can save up to 100€ on a household shop, and petrol is cheaper at 1.09€ a litre in Spain compared to 1.26€ in the UK

Other price comaprisons (Spain to UK)

Eggs: 0.95¢ to 1.64€
San Miguel: 1.50€ to 2.28€
Toilet Paper: 0.72¢ to 2.31€

Although many are warning that Britain is at risk of plunging back into recession based on the remarkably low growth figures (0.1%) compared to an expected 0.4%, the 18 month recession has officially ended and early indications are that it is good news for the travel industry, and therefore one hopes for expats living in Spain hoping to see the tourism related business that so many depend on for their income pick up.

In addition to more travel it is to be hoped that the average spending money taken on holidays rises from the current £295 per person, per week, which is down from £312 6 months ago.

On the same day as the UK announced that it has formely exited the recession, the International Monetary Fund (IMF) have confirmed what many have been saying, that Spain will remain in recession throughout 2010, with low growth forecast for 2011.

To put this into context the Eurozone is forecast to grow at 1% and the world economy by just under 4%

Not before time many will be saying, but it does seem that Spain is finally waking up to the idea of using the internet, and in particular social networking sites like Twitter and Facebook to promote the country.

Turespaña recently presented a new online strategy at Fitur to ustiise the popular social networking sites to allow Spaniards to contact foreigners and promote Spain.