‘Consequences!’ State pension blow as 520,000 Britons to continue to have sum frozen

73-year-old says frozen pensions are ‘unfair’ and discriminating

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Campaigners argue pensioners who have chosen to live abroad should receive the increases those living in the UK have secured. While this has been a long-standing debate, the matter was raised once again in an official Parliament petition which garnered over 11,000 signatures.

It described the frozen pensions policy as “entirely unjust”, describing those impacted as “penalised” by the system.

UK state pension increases are not guaranteed, and will only be enacted if a person lives in the following countries:

  • The UK
  • European Economic Area (EEA)
  • Gibraltar
  • Switzerland
  • Countries with a social security agreement with the UK (but not Canada or New Zealand)

It means British expats – 520,000 according to the End Frozen Pensions Campaign – will miss out on annual pension increases.

This is even the case for those living in some Commonwealth countries which have close ties to the UK.

The petition continued: “Why should we not get equal rights? Pensioners living abroad are less of a strain on the National Health (not using the services of GPs, emergency services etc.), in the vast majority of cases having to fund health care including care homes privately.

“It is only fair that the Government treats all its citizens on an equal basis!”

Campaign groups such as End Frozen Pensions have called for an end to the policy in a similar way, describing it as an “arbitrary postcode lottery”.

However, the Government has resisted the calls to change the policy, in its official response.

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It stated: “There are no plans to change the current arrangements for payment of the UK state pension overseas.”

The longstanding policy has been in place for over 70 years by successive governments.

The official response continued: “The rate of National Insurance contributions paid has never earned entitlement to the uprating of pensions payable abroad. 

“This reflects the fact that the UK scheme is primarily designed for those living in the UK.

“Paying uprating to UK pension recipients in countries where it is not currently paid would mean an immediate increase in costs.”

The Government estimates there are approximately 1.2million UK state pensioners living overseas, with 500,000 not receiving any increases.

If the policy were to change, it is thought it would cost an extra £0.6billion each year.

The Government said: “Paying future increases only would cost tens of millions in the short term but would lead to the cost of full uprating (£0.6billion) in the longer term as older pensioners died and new pensioners became entitled to fully up-rated state pensions.”

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Ultimately, it is the cost factor which has been cited as the primary reason for keeping the UK state pension frozen for certain individuals overseas.

The Government has said it would be unfair to impose an “additional burden” on taxpayers to fund the uprating of UK pensions overseas.

It added: “Ultimately, there is a choice for the individual to make where to live, and what the consequences are should that choice be somewhere other than the UK. 

“The rules on uprating the state pension are clear and well publicised. 

“So the choice to migrate or not remains a choice for the individual.”

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