By Sarah Toyne BBC News Online personal finance reporter at the High Court in London

Nearly half a million British pensioners who've retired abroad have lost the battle for the right to have their state pensions uprated in line with inflation.

And the pensioner who brought the case has been ordered to pay costs estimated at �100,000.

Countries where state pensions are frozen include

Australia Canada Hong Kong South Africa Zimbabwe New Zealand Trinidad & Tobago Source: UK Government, March 2000

The High Court had been asked to decide whether the human rights of those living in countries such as Australia, South Africa and Canada had been breached because their pensions were frozen - leaving some on just �10 a week.

The judge acknowledged grievances felt by these people, but said the issue was a political matter and for Parliament to decide.

The decision was attacked by Charles Poole, president of the South African Alliance of British Pensioners (SABP), who said that if it were upheld, it would be "a very bad day for human rights in the UK".

Appeal

Mr Justice Stanley Burnton said: "In my judgment, the remedy of the expatriate UK pensioners who do not receive uprated pensions is political, not judicial.

Fairness is not prevailing at the moment

Alan Kessel, Canadian High Commission

"The decision to pay them uprated pensions must be made by Parliament."

The test case was brought by Annette Carson, a 61-year-old British pensioner living in South Africa.

She was ordered to pay costs, but was also given leave to appeal.

Human rights

Ms Carson had challenged a refusal by the UK's Department of Work & Pensions to uprate her state pension in line with inflation.

Our priority is to ensure that pensioners living in this country benefit from the growth in the economy

Department of Work & Pensions

The case could potentially have affected up to 490,000 British pensioners living overseas in countries such as Canada, Australia and New Zealand, who do not have their state pensions uprated each year.

About 330,000 people living in other countries, including the United States and European Union countries, receive state pensions which rise in line with inflation.

Ms Carson, who moved to South Africa at the end of the 1980s, claimed that the refusal amounted to unlawful discrimination, in breach of the Convention on Human Rights.

Ms Carson was supported by the SABP and the British Pensioners Association of Western Canada.

Age Concern Director General Gordon Lishman called the decision "scandalous".

He said: "People have to pay National Insurance contributions throughout their working life to be entitled to the full basic state pension, and therefore it is scandalous that they should not benefit from the annual inflationary increase that pensioners living in Britain receive."

Disappointed

Graham Chrystie, Ms Carson's London-based solicitor, said he had spoken to her on the telephone shortly after the judgement.

"Annette is very disappointed. She had the impression from the hearing that the judge seemed to be very supportive of her case," he said.

Mr Chrystie said his client and supporters were particularly upset with a decision by the DWP to pursue costs.

"They are appalled and astounded by the attitude of the DWP. It was felt that they were extremely aggressive in their application for costs."

Mr Chrystie said they would now consider carefully whether to pursue an appeal, which must be lodged within 28 days.

However, he said that "in some ways" they were encouraged by the way Mr Justice Stanley Burnton had so quickly given leave to appeal.

Fairness

The case has attracted the interest of the Australian and Canadian governments, whose representatives attended the hearings at the High Court.

After Wednesday's hearing Paul Dacam, a lawyer for the Australian Government said: "This judgement means that the UK Government can and will continue to discriminate against Australian, South African, New Zealand and Canadian UK pensioners".

Countries where pensions are uprated include

Austria Barbados France USA Switzerland Greece Source: UK Government, March 2000

The Australian government is believed to be considering whether it could help fund an appeal by Ms Carson.

Alan Kessel, a minister at the Canadian High Commission, said the Canadian Government would continue to campaign at the "highest political levels" for equal treatment of the147,000 UK pensioners in Canada.

He said: "Fairness is not prevailing at the moment."

In a statement, the Department of Work & Pensions said: "We are pleased that the court has recognised the government's obligations to pensioners living in this country.

"Our priority is to ensure that pensioners living in this country benefit from the growth in the economy."

I opted out of the British tax/NI schemes some 16 years ago. The money saved from the NI contributions was invested elsewhere. I am perhaps fortunate in my chosen country of residence. The ruling against my fellow expats is tantamount to daylight robbery. I hope that people will help fund an appeal to which I would gladly contribute.
Malcolm Davis, Thailand

How about refunding all the money my father paid over his working life?

Christine Roberts, Australia

My father worked for the British Government for most of his life, in Africa. He also fought right through the second world war for the English people. When he retired he was given 34 pounds and told that even though he had served his country well and paid his dues, because he chose to retire in Australia, his pension would, from that moment, be frozen. He contributed to the British economy. He is now 82 and still gets a weekly pension of 34 pounds. How dare the government and some small minded individuals suggest that he is not entitled to what every other pensioner is entitled to. And as for those who feel that no pension should be paid to anyone who wishes to live abroad, then how about refunding all the money my father paid over his working life that entitled him to a pension? You benefited from his contributions. You can't have it both ways. What a mean spirited bunch of people you are.
Christine Roberts, Australia

Surely when considering the cost of paying frozen pensioners their full entitlement, the savings in community health care and hospital care (over one billion pounds a year) by these pensioners not claiming any benefit, should be taken into account.
John E. Gould, Canada

Were the pensioner(s) aware that the UK govt was going to act in the manner that now distresses them? If so and they still chose to leave the UK then it is a decision that they may have to live with. However, if they believed that they would be treated fairly by the UK govt, then they have a reasonable grievance against the govt. The underlying message of course is can you ever trust any govt in any matter?
Mike Holland, Australia

What the people who say that we are not contributing to Britain fail to realise is that though we live and work outside the UK we had to at some time have at least worked within the UK system and paid taxes to the UK government to be able to qualify for a full or part pension. All pensioners should be treated the same and not discriminated against because of the location they choose to live out their retirement years. Those who would seek to deny others a just pension based on there own circumstances should look at the whole picture not just their isolated view of the world. Not all ex-pats living overseas are as fortunate as them
Peter Ellingsen, Australia

British Citizens abroad appear to have less rights and entitlements than foreigners that enter the UK

Michaela Ann Rhodes-Elson, UK

My parents live in South Africa and have diligently kept up their National Insurance contributions for the last 30 years. They will be greatly affected by this latest ruling and yet they will cost this government no more than a basic pension. It is simply outrageous that British Citizens abroad appear to have less rights and entitlements than foreigners that enter the UK looking for asylum and support. Furthermore I feel that the DWP pursuing costs for this case is nothing short of scandalous. The fact that I had to visit this website to discover the outcome confirms for me that this is a humanitarian outrage which the powers that be would be happy to bury.
Michaela Ann Rhodes-Elson, UK

I believe one reason why the British government does not adjust pensions for expats living in New Zealand is that any increase would flow directly into New Zealand government coffers. Under NZ legislation, overseas pensions (including British ones) are fully deductible from the NZ age benefit. Any increase to the British pension would mean a lower payment by NZ - a saving for the NZ Government. Unfortunately, I also believe that the current members of the NZ political assembly don't really know what to do with this issue so they ignore it. Thanks to the Australian government for standing behind the victims of unfair pension discrimination !!
Peter van Bussel, New Zealand

I did my time for Queen and country, and paid taxes and N.I. contributions for the privilege of defending the values I hold dear as both a past British and current Canadian resident. Among those values in a democracy is to live where you choose. Naysayers want to deprive us of those rights we British suffered so much to gain.
John Nicholls, Canada

UK pensions have immense buying power in cheap countries

Tim Saunders, New Zealand

I have every sympathy with the British government on this matter. There are two issues. Firstly, every pound paid to a pensioner living abroad is lost to the British economy and gained to the economy in which the pensioner lives. Secondly, UK pensions have immense buying power in cheap countries like South Africa.
Tim Saunders, New Zealand (ex UK)

My father lives in South Africa and worked for BP for many years. He paid his National Insurance contributions without fail at the same rates as those people working in the UK. Our family moved to South Africa in the 70's. My father is due to retire in 2 years time. Why should he not have his pension increased like the other British pensioners living in America or other "selected" countries? I think this is scandalous and this government, that prides itself on fairness should be ashamed.
Alan Stephens, England

I am an ex-pat living in Canada. I am not a pensioner but I have been in the pensions business for over thirty years. The decision in this case is probably correct but not right. My take on this whole issue is that any benefit to which members contribute must be at arms length from government thus bringing a business sensibility rather than a political one, to the operation. Contributors, no matter where they reside should be eligible for cost of living adjustments and the cost of such adjustments must be built in to the premiums. Restructuring is required. The Canadian government has taken strides to move its Canada Pension Plan away from the politicians. Britain should follow suit.
Stan Smith, Canada

Why are some countries covered by the indexing and others not? I "paid my dues" in England and need that pension now. Blair is a great disappointment - he becomes more like Maggie every day.
Trevor W. Jackson, Canada

I feel that I am being discriminated against

John, USA

I am a Scot and proud of it and have been paying into the system from overseas for years. Now that I am close to retirement I am planning to move from the US back to Canada where I lived for 18 years. Now I find out if I stay in the US my pension will be indexed but if I move to a Commonwealth country, Canada, I lose this right. I'm sorry but I feel that I am being discriminated against by making this move. This is not right. Either give us all the same rights or take them away from all of us.
John, USA

When I started paying National Insurance many years ago, I was given to understand by the Government that part of this money was a pension contribution, so I was saving toward retirement. Why then should I not be paid a full pension if I decide to live abroad if my contributions are up to date?
Mike, England

Some contributors seem to be missing the point. This has nothing to do with subsidising these people through tax. Assuming these pensioners have fully paid up for their pension through National Insurance then they are entitled to the same rights as persons living in the UK. Anything else is just pure discrimination, even more so because pensioners living in the USA and Europe are paid in full!!
Mike Rose, UK

I think it a little rich of people to complain about paying taxes to fund pensions of pensioners now living abroad. After all, these pensioners have paid taxes to the British Government all their working lives. They have paid their dues and hence bought the right for their pensions. It was only due to the severe foreign reserve shortages in the fifties that our Government went down this road in the first place. Our country is meant to be the fourth richest economy in the world now. It is time to pay the ex-pats and the Gurkhas their full pension entitlements.
G.P.Russell, England

What difference does it make where they choose to live?

Mike Collins, UK

I don't think I have ever heard such an appalling lack of fairness. These people have paid their National Insurance contribution for many years, so what difference does it make where they choose to live? One could argue that they deserve a HIGHER pension as they are not able to take advantage of other benefits available to pensioners. Ridiculous.
Mike Collins, UK

As time passes and travel and other means of communications become cheaper and easier, inevitably more people will be moving abroad for their retirement. Treating all pensioners alike, no matter their location, must be the only viable way forward in the long term. Treating pensioners in different ways depending on whether they are living in countries on a given list, as seems to be the case here, is (a) unfair, (b) short-sighted and (c) it has to be said, pretty stupid. And of course it is discriminatory!
Dr Mark Bailey, UK

A former UK resident living in Canada is entitled, with some restrictions, to the Canadian Old Age Pension and, in many cases, the Canada Pension which is a contributory pension. While not as generous as the UK Old Age Pension, these pensions are considered adequate for Canadians. The fortunate UK immigrant therefore gets three state pensions instead of two and, if married, gets six state pensions instead of three. Those who stay in the UK get just one state pension or two if married. While I readily admit it would be nice to have our UK pensions indexed, I do also feel it would be a bit hard on the poor old UK taxpayer to have to keep topping up our pensions. Let's be honest, if you live in Canada, the USA, Australia or New Zealand, you are bound to be better off, on the housing front alone, than if you were still living in the UK. We mustn't be greedy.
Margaret , Canada

If one has funded a state pension through national insurance contributions, one has earned that pension, and it should be paid fully no matter where one might be resident! To do otherwise is robbery.
Barry Rochfort, England

Why ask the British tax payer to fund their life-styles.

Iain, Scotland

I think the ruling is correct. These people are presumably well enough off to live in a foreign country. Also they are contributing nothing to the British economy as all their money will be spent in the country they're living in. So why ask the British tax payer to fund their life-styles.
Iain, Edinburgh, Scotland

I left England in 1987 because I was made redundant twice in two years. I obtained employment as a automotive designer in Canada continuing to pay my pension contribution each year to the Overseas Branch DHSS until I had made a "full life" contribution for pension rights. The High Court judgement is a travesty and a slight on all those Brits who would qualify for increases. The Government should remember that most expatriates are extremely loyal to Great Britain and it should give less consideration to refugees and more to its own kind. I am disgusted.
Ralph Vickery , Canada

Providing the person involved has paid the relevant NI contributions, then they should be entitled to the same pension rights as people living in the UK. It is absurd that someone who emigrates to, say, the USA, should receive pension increases, whereas those who emigrate to a Commonwealth country, like Australia, do not.
Andy Robson, UK

Every Pensioner has contributed via their National Insurance contributions towards their pension. They should be entitled to the same amount of pension no matter where they reside. Their contributions were an investment in their future and unless the DSS department refunds these contributions with interest I feel the DSS are breaching the pensioners human rights.
R Borsje, UK

Well, if people choose to retire abroad, that is their decision and they do so aware of the consequences. I don't see why UK taxpayers should help out people who have effectively said "goodbye" to the UK.
Doug, UK

This is just plain wrong.

Barry G.Brown, USA

If these people have contributed to the system during their working lifetime, they should be entitled to the same pension as anyone else. I'm British living in the US, so it appears that any UK government pension I receive will be indexed, and yet people who have made equal contributions to the system, and are now living in the major commonwealth countries are to be discriminated against. This is just plain wrong. When will certain sections of Whitehall realise that the days of civilization ending at Dover are long gone?.
Barry G. Brown, USA

Well, if people choose to retire abroad, that is their decision and they do so aware of the consequences. I don't see why UK taxpayers should help out people who have effectively said "goodbye" to the UK.
Doug, UK

Maybe the judge is technically correct ruling that it is an issue for parliament to sort out rather than the courts. But plainly it's not fair that the British government increases pensions for expats in some countries and not others. The government is just being mean and bureaucratic. Also, since it's an issue of wide public interest affecting so many Brits overseas, it seems punitive that the judge should impose �100,000 costs on the individual bringing the action.
Roy, UK

The key thing to note is that if a pension is paid to someone resident in the UK, most of that money is returned into the British economy so the real cost is lower than paying it abroad. The discrepancy that exists of different policies for different countries should be addressed by not paying ANY pension to someone who CHOOSES to live abroad (with the possible exception of EU countries).
Dave Hounslow, UK

Once again, the government shows its ability to vacuously avoid answering the point. What twaddle from the Department of Work and Pensions who said: "Our priority is to ensure that pensioners living in this country benefit from the growth in the economy." What about allowing to benefit, fairly, ALL UK pensioners - whether now resident here or not - who in the past contributed to the foundation on which today's economy stands?
Patrick Sedgwick, UK

This debate is now closed. Thank you for your comments.