Half a million UK pensioners abroad to miss out on £460 state pension increase

Pensioner looking upset
-Credit: (Image: GETTY)


The triple lock mechanism, introduced by the coalition government in 2011, was designed to protect pensioners from inflation. It promised to increase the state pension annually by the highest figure between inflation, wage increases and 2.5%.

However, many pensioners have not received any of these increases. This is due to the freezing of the state pension for those who choose to retire abroad. As a result, the 500,000 Britons aged 66 and older currently living overseas will not receive the £460 state pension increase due next April.

Sheila Wills, a British pensioner living in South Africa, spoke to The Telegraph about her situation. After her husband's 40-year career in British overseas development aid, they settled in South Africa.

Since his death in 2016, her only income has been the British state pension she inherited, which amounts to just £67 a week, reports the Manchester Evening News.

Receiving no other assistance from the UK or South African government, she struggles to make ends meet. The 87 year old revealed that her husband was never informed that his pension would be frozen if he chose to retire in a country without a reciprocal agreement.

She recounted: "My husband and I were of the generation that were born pre-war, we lived through the shortages, dangers and deprivations of the war years and were then the generation that went to work, to once again build Britain...I am now a widow, trying to survive on a pension that was considerably reduced after the death of my husband."

Pensioners are calling on the Prime Minister to overturn what they describe as the "totally immoral" policy that prevents them from receiving an annual increase in their pensions. This rule has been in effect since 1955, which predates the birth of some of the pensioners who are now adversely affected by it.

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When the British state pension became payable worldwide, the UK government formed several reciprocal agreements with other countries to ensure pension payments were updated over time. These agreements cover most of Europe and the USA, but notably, many Commonwealth countries lack such agreements, leaving British expatriate pensioners at a disadvantage.

Statistics suggest that 40% of British pensioners living abroad are in countries without these agreements, with more than 80% of 'frozen' pensions being received by those in Australia, Canada, and New Zealand. In contrast, Canada and Australia have secured agreements that allow their pensioners residing in the UK to benefit from annual increases.

Labour's manifesto did not address the topic of frozen pensions considering the potential costs. The Department for Work and Pensions estimates that updating income levels for pensioners might cost about £4.59 billion from 2023 to 2028.

However, the International Consortium of British Pensioners contends the expense would be nearer to £60 million annually since they propose the change should take effect from the implementation date rather than retroactively.

A spokesperson from DWP told the media: "The Government's policy on the uprating of the UK state pension for recipients living overseas is a longstanding one of more than 70 years and we continue to uprate state pensions overseas where there is a legal requirement to do so."