The 500,000 pensioners who won’t see a penny of the triple lock boost
Retirees living in Britain are in line for a 4pc state pension increase from April, worth £460. However, half a million retired Britons living overseas will not see a single penny.
Their pensions were frozen on the day they left the country, meaning their entitlement is whittled away by inflation. Many are missing out on thousands of pounds a year compared to their domestic counterparts.
They have now urged Sir Keir Starmer to reverse the “disgraceful” and “totally immoral” policy that denies them an annual increase to their state pension.
Britain has deals with the US, most of continental Europe, and several other countries to ensure expat pensioners are shielded from inflationary pressures.
There, as in Britain, the “triple lock” ensures that the state pension rises every year by the highest of inflation, wage growth or 2.5pc.
But in the rest of the world – including the Commonwealth – there is no “reciprocal agreement”, and British pensioners pay the price.
‘I’m losing out on £1,872 a year’
Chris Lee decided to move to Thailand 14 years ago to spend his retirement in the sun. Thailand does not have an agreement with Britain, so his state pension was frozen when he turned 66 in 2021.
He said he is “absolutely gutted” to miss out on the 4pc boost next year, adding: “The recent [state pension] rises have been phenomenal. It’s money we’re entitled to. I paid 37 years of National Insurance contributions.”
He receives state pension payments of £131 a week, less than the full £221.20 he believes he should be entitled to, given his National Insurance record, which exceeds the 35 years needed to gain the “full” amount. He says his former employer “contracted out” his pension without his knowledge, thereby reducing his entitlement.
Mr Lee’s weekly payments would have reached £167 next April had they been uprated, meaning he will be losing out on £1,872 a year.
He said: “It’s totally immoral and wrong. We’re not a burden on the state – imagine if we all came back to the UK and how much that would cost in terms of healthcare and benefits.
“Thailand is not an expensive country but even so, prices increase each year and the value of our pension diminishes.
“If you live in the Philippines you get the increase, but not if you’re in Thailand. It’s disgraceful.
“I wish we could get someone [with influence] to have a go at the Government to change this. We email MPs but we get the same old stock replies. I want to ask Keir Starmer to put himself in our shoes and see how he would feel.”
The frozen pensions issue dates back to before some of those affected were born.
In 1955, British state pensions became payable anywhere in the world – but were not inflation-linked. Britain negotiated dozens of reciprocal arrangements with countries to uprate pension payments over the following years.
Yet despite decades of campaigning by expat pensioners in dozens of countries, successive governments have refused to increase their payments on the basis that there is no deal in place with the country in which they live.
Some 40pc of pensioners living outside Britain have their pensions frozen and over 80pc of these frozen pensioners live in Australia, Canada and New Zealand.
However, despite not having struck a reciprocal deal, both Canada and Australia provide annual increases to their pensioners who live in Britain.
‘I get just £67 a week’
Sheila Wills, 87, lived all over Africa during her husband’s 40-year career in British overseas development aid.
When his posting in Swaziland came to an end, the family decided to settle in South Africa. However, on retiring years later, her husband discovered his state pension would be frozen.
Ms Wills insists that at no point during her husband’s correspondence with the British government was he advised that his pension would not rise should he decide to live in a country that did not have a reciprocal agreement in place.
Her husband died in 2016, and she relies on the fraction of his state pension that she inherited as her sole source of income – just £67 a week.
She receives no help from Britain or the South African state, and is struggling to get by.
She said: “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.”
“There was no financial help to attend universities or colleges. My husband spent years studying and taking exams, part-time, to gain his qualifications.
“I am now a widow, trying to survive on a pension that was considerably reduced after the death of my husband.”
The amount it would cost to unfreeze state pensions is contested.
Uprating the pensions of overseas residents to the level they would have reached if they had never been frozen would cost £940m in the 2024-25 financial year and £4.59bn between 2023 and 2028, according to Department for Work and Pensions (DWP) estimates.
However, the International Consortium of British Pensioners has disputed this figure, arguing that the uplift would only start from the day any deal was signed, rather than being backdated.
It estimates that the true cost of the policy change would be just £307m over five years, or around £60m a year. By comparison, the total state pension bill was £110.5bn in 2022-23.
There is no sign that frozen pensions will be unfrozen any time soon. Labour’s manifesto was silent on the issue.
The DWP has previously said that its “priority” is to ensure every pensioner receives the financial support “to which they are entitled”.
A spokesman added: “We understand that people move abroad for many reasons and we provide clear information about how this can impact on their finances.
“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.”
