State pensioners living abroad are being hit by a cruel Department for Work and Pensions (DWP) rule that is leaving them £3,000 short. Expats living in "frozen" countries such as Australia, Canada, and South Africa are missing out on more than £3,000 in pension increases since 2023.
Petition Gains Momentum
A petition calling on the Labour Party government to scrap the frozen pension policy has gathered more than 7,300 signatures. Tim Grimsditch, the petition creator, said: "Over the last three years, the New State Pension has increased by £37.45 per week - that's roughly £162 extra a month." Many recipients receive a state pension that is a fraction of what they would get if they had stayed in the UK or moved to one of a list of other countries.
Why Are Pensions Frozen?
Although the UK state pension is payable overseas, it is not “uprated” annually unless there is a legal requirement to do so – for example, where there is a relevant reciprocal social security agreement in place. State pensioners affected by frozen rates have missed out on a combined £3,237 in increases, figures show.
Expert Warnings
Nigel Green, CEO of DeVere Group, said: "A significant number of British expats are at risk of being shut out of cost-effective ways to secure their state pension. Over time, switching from Class 2 to Class 3 [NI contributions] can add thousands of pounds to the cost of securing a full or partial state pension, fundamentally altering long-term retirement planning calculations." Mr Green added: "Eligibility is tightening at the same time as costs are rising. Anyone who has worked in the UK needs to assess their position now, because the options available today will not necessarily exist after April."
Advice for Expats
Mr Grimsditch said: "This is a reminder that you can't always rely on the State Pension when you retire, especially if you're thinking of moving abroad. Planning now is usually the best way to ensure you can live comfortably, no matter where you end up."
