An estimated 60,000 state pensioners are losing a long-standing perk from the Department for Work and Pensions (DWP), it has been revealed. According to a Labour Party minister, 60,000 veterans are missing out on annual payment rate increases under current DWP rules.
Triple Lock Mechanism
Under DWP regulations, state pensioners receive an annual payment rate rise thanks to the triple lock, which has been in place since 2010. This mechanism raises state pension payments by the highest of three figures: the rate of inflation, average wage growth, or 2.5 per cent. However, an estimated 500,000 British expats are not entitled to this increase, with some receiving a state pension from decades ago.
Frozen Pensions Policy
This policy is commonly referred to as "frozen pensions" and primarily affects those who have moved to countries without a reciprocal agreement with the UK. DWP minister Torsten Bell explained: "The UK's policy on the uprating 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." He added that this approach has been supported by successive governments, with priority given to those living in the UK when drawing up expenditure plans for additional pensioner benefits.
Campaign Against Frozen Pensions
The End Frozen Pensions campaign group stated: "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."
State Pension Eligibility
To qualify for the full state pension, individuals need a 35-year National Insurance (NI) record. For at least some state pension, albeit a reduced amount, a 10-year NI record is required. Pensioners can choose to have their state pension paid into a UK bank account or a bank account in the country where they reside.
