12 November 2019
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Britons who decide to retire to a country with no social security agreement with the UK could lose as much as £50,000 in pension income over the years as a result of their pension being frozen.
The 666,000 retired expats who live in Europe and a handful of countries further afield, such as the US, Jamaica and the Philippines see their payments regularly uprated. But 528,000 have their pensions frozen, the vast majority of them living in Commonwealth countries including Australia, Canada, New Zealand and South Africa.
The state pension only increases annually if a person lives in the European Economic Area (EEA), Gibraltar, Switzerland, and countries that have a social security agreement with the UK - however the uprated state pension cannot be received in Canada or New Zealand. A person will not get the yearly increases if they live outside of these countries.
The same must be said about the half million UK pensioners living outside the UK and EU whose pensions are frozen, who include military veterans, former nurses and teachers"
Assuming that the flat-rate state pension is frozen at the 2019/20 level of £8,767 per year and compared to a state pension updated by 2.5% annually, the total income over 20 years would be £175,344, compare to £223,955. A fall of £48,611.
The state pension is expected to rise by 3.9% from April - more than double the rate of inflation. Such an increase means pensioners can expect an rise of just over £6 per week on the New State Pension from the current rate of £168.80.
Second World War veteran Anne Puckridge, 94, is an example of the iniquity of the system. The former intelligence officer in the Women's Royal Naval Service moved to Canada in 2001 to be closer to her daughter and so receives £72.50 a week, the going rate at that time.
Had she moved to the US, she would now be receiving £129.20 a week.
More than 40 MPs are calling on the government to overturn an enduring injustice affecting State pension payments to half a million UK nationals living overseas.
The MPs write: "The same must be said about the half million UK pensioners living outside the UK and EU whose pensions are frozen, who include military veterans, former nurses and teachers.
"Many have served the UK in its darkest hours and are now being plunged into poverty because their State pension continues to reduce in value year-on-year."
UK expats in EU countries will continue to have their state pensions uprated in a no-deal Brexit scenario, the government has said. However, the uprating of their state pensions has only been guaranteed until March 2023.
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