Thursday, March 29, 2012

How do the British Pensioners live in France?

UPDATE -  The posting 'Shopping in France' is a useful accompaniment to this post.  It compares a shopping list in the UK and France from time to time, and  gives figures for inflation and the effect of the exchange rates.  ***View it here***.   Last update June 2015

In 2012 I met a British pensioner of long acquaintance in our local supermarket at Gourdon, my home town in the Department of the Lot, France.  I had not met him for some years and at first did not recognise him.  He looked much older than I remembered and appeared distressed.   ‘We’re selling up’ said  Jerry ‘if we can find a buyer for our house’.  I knew he and his wife Anthea had been resident in France for at least 15 years and before that had owned a second home here during the time he was teaching in Britain. 
‘Why do you want to go back?’ I enquired.  ‘Its just too expensive here’, he said.  ‘We can’t manage any more’.
It is indeed expensive.  The food costs are more here than in the UK.   I keep a price comparison list.   You can easily view the prices in Tesco online and similarly discover the general price of petrol in the UK.
In March 2012 I began such a comparison –See the link above. The basket of goods cost the equivalent of 92.07 euros in Tescos, and the same list was 104.23 euros here in Gourdon. That is to say 13% more expensive compared to Britain.  Even four star petrol was fractionally higher in price in March than in Britain.  Fifteen years ago everything was so much cheaper in France. The repeated exercise in March 2013 was far worse.  The £ dropped in value by 10% since December 2012 and French inflation soared to 12% (on my figures). The same basket of goods cost 108 euros, which was 17% higher than in the UK. [ n.b. June 2015. The situation has improved since 2014 - but is still not equitable with UK prices.]

The difference in price is enough that many Britons living in France buy various large items, clothes and the like  via the internet from England,  Nowadays, Marks and Spencer’s, John Lewis,  and even much smaller stores will send goods to France and even with the delivery costs it is still cheaper to buy this way.(* see comment 5 below)
From personal knowledge I know that small pieces of machinery such as parts for a chain saw  can be purchased more cheaply from Britain than in the local shops.  Electric fencing and garden ‘seep’ hoses can be so purchased similarly from Britain at a cheaper price than locally. Clothes, china and so on are all frequently available more cheaply from the UK.
Why is this?  The exchange rate has much to do with it.  We hear so often through the British radio and television that the Euro is in dire trouble.  My inkling is that we should pay more attention to the markets than to the economic soothsayers of the press and the somewhat biased pronouncements from any Government voice.   The undoubted fact is that the Euro has stayed strong against the pound although since 2014 the rate has improved  The £ stood in 2012 any where between 0.87 (April 2012!) (as in the price comparison linked above) to about 0.83 pence to the euro.  In 2015 it has been about 0.73.  It would be more equable in buying power today at about 0.67 - 0.70 pence.  The more the UK Government go on ‘printing’ money the more it will stay weak and even get worse.  [update note- on May 26th 2012 - From April, to July the £  climbed dramatically .  From July to December it fell back again.  Can we be sure of anything in this world?]
My acquaintance and his wife were teachers.   Because of the extraordinary law on taxation this means that they are taxed on their pensions by the United Kingdom.  The law is most decidedly an ‘ass’.  My enquiries to the HMRC as to why this should be so, get the answer ‘Because the pension comes from public funds.’  This is an absolute bananas of a reply.  The Old Age State pension quite transparently comes from public funds, yet that is not, for the British pensioner living in France – I repeat is not - taxed in the UK but is exportable for taxation to France! 
The utter stupidity of the laws on taxation of pensions is repeated elsewhere in Europe.  Would you not agree that the pensions of nurses comes via the public purse?  Yet those nurses who retire to France and Spain can have it taxed in France or Spain.  Those who retire to Germany must by law have it taxed in the U.K. 
The consequence for my acquaintance is that they pay far more income tax to the UK than they would if they were taxed in France.  Moreover as they are clearly of advanced years and I know that Anthea suffers severely from arthritis, they need the aid of a ‘home-help’.   In France the costs of this employment are 50% deductible against tax.  Since their income tax is collected by the UK, this relief is not possible for them.   To add extra absurdity the French take the teachers pensions into consideration when viewing their liability to taxation on their State Pension and their local property taxes.
So, through the complexity of archaic laws which derive from the United Kingdom they get a double whammy of an artificially distorted exchange rate and the hard luck of being suspended between two different sets of laws on taxation.
Because they have been non-resident in the UK since before 1998 they had not received the Winter Fuel Payment {see note at end].
Then again, our two aged people have to subscribe to their health care in France.  This will cost them more than 1500 euros a year and possibly 2,000 (about £1650).  I am convinced that this is because of a misinterpretation of European law.   The EU regulations on health say that the British pensioners should receive health care in France as any French person should receive it and that the cost should be borne by the U.K. Now the exact wording of the law on costs says and I quote……  
For the purposes of applying Article 35 and Article 41 of the basic Regulation, the actual amount of the expenses for benefits in kind, as shown in the accounts of the institution that provided them, shall be reimbursed to that institution by the competent institution.”  [EU Regulation 987-2004, Article 62]
The competent institution is the U.K. Department of Health.  The U.K. is responsible under EU law for the Social Security costs of all British Pensioners living in the EU who have never paid into any social security of their host country but only into the British system.   It is beyond belief that the precise wording of this regulation can be so ignored. (*The EU Regs need examination by a trained legal mind, especially 987-2004 Article 24 - residence in a State )
Here is part of an email, written on the 10th February, from another acquaintance. Just as I was yesterday, I am typing Emails sitting up in bed. I am  fully clothed in three jumpers, two pairs of trousers and a track suit. 
My dear husband, similarly dressed, is tucked up beside me.  He is eighty-six, and suffers from epilepsy and  a certain amount of mental confusion.
Outside the temperature is minus 2 degrees, and is expected to fall to minus 10 degrees tonight - a big improvement on the  minus 14 degrees we had last night
And another (let’s call her Ethel) who wrote to me about the non-receipt of the Winter Fuel Payment.  I know that their health insurance costs them over 2,000 euros a year.
As you can imagine, this past year has been extremely hard on both of us and it is only with the support of the excellent French health professionals as well as the kindness of our friends and neighbours (both French and British) that we have managed to cope.   We live on a joint pension income of 12,000 pounds sterling per annum and have to draw on our very modest savings to supplement this.   Because of our low income, we downsized seven years ago to a tiny, one-bedroomed house which my husband converted from a carpenter's workshop but his illness and treatment cause him to feel the cold in the extreme and, in spite of the size of our house, I dread to think what our heating bill will be this Winter.  It is so dreadfully unfair that we and others in our situation are not allowed to receive the Winter Fuel Payment [see note at end] from the British government when our compatriots do!  And, of course, there is nothing we can do about it as, having lived in France for more than fifteen years, we are now disenfranchised as well!”
This letter from Ethel, just about sums up the predicament.  The EU is supposed to allow free movement of people, with neither loss of privileges nor obstructions placed in one’s path.   Yet the British Governments since 1973 have not considered in any manner at all how the diaspora of British folk are faring in the wider Europe.  Most of the pensioners are ordinary folk, some rich, some poor, but mostly in the middle income brackets.  Most moved to the continent because housing was cheaper and they felt sure that the pound would stay strong.. But the fact is that they are treated as non-existent citizens by their own country.   The UK Governments still tax many of them. The Government ignores it responsibility towards their health care. The Governments have disallowed  the Winter Fuel Payment [see note at end] to the most elderly.  And to cap it all the Governments have not allowed them to be appropriately represented in Parliament [see note at end].  
And now some are forced because of financial difficulties to attempt to return to the UK where no doubt they will add to the population pressure on the health service and the local social security departments.
 [The Winter Fuel Payment - AUGUST 2012 -- Because of pressure from the EU helped along by certain knowledgeable expatriates - the Government DWP has caved in and accepts that the WFP is payable to all those in the EU/EEA who would receive it if their residence were otherwise in the UK.]
[Further note  on the WFP - January 2014- The Government has decided that France is a HOT country and on that basis will not pay the WFP to those of us living in France - But Italy is defined as 'not hot' -
View a relevant link here!] 
[The disenfranchisement is being strongly fought -- 
visit and comment ]

Thursday, March 8, 2012


The European Union news agency  ‘Eur-Active’ on March 1st.  announced an important new item of legislation which might (or might not!) affect the hundreds of thousands  of British citizens in Europe.   It concerns inheritance.  The item is produced verbatim below.
This piece of legislation brings into sharp focus why the British citizen needs some form of representation at Westminster!
Britain has opted out of this legislation.
Has it thereby opted out every Briton in Europe? Or not?
Can a Briton in France now choose which inheritance rule his inheritance will follow?  French or British?
Can a Frenchman dying in Britain choose? Or must he follow British Law?
Is someone with dual nationality stuck with French law?
Can you choose that your property is inherited under the law of Britain?
But who speaks for us the British Expatriate in these matters?  No one! 
We have no voice! 

European Certificate of Succession inheritances

EU citizens living in a different country than their own will be able to choose which legislation applies when their heirs settle legal inheritance matters,  effectively preventing legal disputes between courts.
The legislation represents big progress for European citizens, said centre-right German MEP Kurt Lechner, in charge of the report, which was adopted unanimously by the European Parliament’s legal affairs committee.
”It’s a big step forward for the testator, who will be able to exercise his freedom to deal with his succession, and a huge simplification for the heirs,” said Lechner.
In a nutshell, citizens living in another EU member state will be able to state in a so-called European Certificate of Succession which national system they want their inheritance to go through in order to safeguard the rights of heirs, as well as other parties, such as creditors.
For example, an Italian woman married to a Briton and living in Belgium will have the option to choose whether her heirs inherit assets under Italian or Belgian law, avoiding jurisdictional legal disputes.
The use of the certificate is not mandatory. If the person who dies does not draw up a will or a certificate, his or her succession will be dealt with under the law of the member state where he/she had her residence.
The European certificate avoids conflicts that could otherwise come up if several courts in different member states declared themselves competent to handle the inheritance.
”The death of a family member is a sad and traumatic event, without additional legal headaches,” said EU Justice Commissioner Viviane Reding, the Commission’s vice president.
The new law on international successions affects millions of citizens. In 2010 more than 12 million people lived in an EU member state other than their own, an increase of 3 million compared to 2005.
The trend in cross-border ownership of assets is also growing massively. It is therefore likely that more assets may be inherited across borders than in the past and that this trend will continue in the future, with consequent tax problems. Potential cross-border inheritance cases range from 290,000 to 360,000 per year.
“I hope that Parliament and Council will be able to come to a final agreement soon. Notably, the European Certificate of Succession would substantially facilitate the legal formalities for successions in cross-border situations,” said Reding.
The regulation would not apply in
UK and Ireland, as their respective governments decided to exercise their right to opt out.