This is commonly referred to as ‘frozen pensions’, affecting those who relocated to certain countries that have no reciprocal agreement with the UK. These include Canada, New Zealand, Thailand, and South Africa, with campaigners pushing for reform for years. Answering a question from a fellow MP, Pensions Minister Torsten Bell outlined what assessment the DWP has carried out regarding the impact of frozen state pensions on UK pensioners living abroad.
He drew attention to how long-standing this policy is and made clear there are no immediate plans to alter it.
He wrote: “The UK’s policy on the up-rating of the UK State Pension for recipients living overseas is a longstanding one.
“The UK State Pension is payable worldwide without regard to nationality and is uprated abroad where we have a legal requirement to do so.
“This approach has been supported by successive governments, over many years with priority given to those living in the UK when drawing up expenditure plans for additional pensioner benefits.”
When a person’s state pension is caught by the frozen pensions policy, it means they’ve relocated to a country where the UK has no legal obligation to uprate their payments in the way it would have done had they remained in Britain.
While pensioners continue to receive the same state pension amount they were entitled to upon initially leaving the UK, this sum loses its real-world value as inflation rises.
In the most severe instances, some people are receiving just £20 a week according to the End Frozen Pensions campaign, compared to the current full new state pension of £241.30 a week.
The campaign states: “Many of these pensioners have committed their working lives to British society, including over 60,000 veterans and many civil servants. The frozen pensions policy is a political choice and an accident of history. It could be ended unilaterally by the UK through domestic legislation.”
Campaigners also assert that 86% of retirees now impacted by this policy weren’t informed their state pension would be frozen before departing the UK.
The complete list of countries with an agreement with the UK for uprated state pension payments is available on the Gov.uk website.
