Half a million to be denied record state pension boost

Half a million British pensioners living abroad will be denied a record boost in the state pension next year, due to “grossly unfair” rules that freeze payments for those retiring to Commonwealth countries.

Expats will permanently miss out on a £972 increase next April, amounting to a loss of £19,440 over the course of the average retirement.

Pensioners in Britain and certain countries, including EU nations, receive annual increases under the “triple lock”. However, more than 492,000 UK retirees around the world are denied their state pension in full, with the payouts they receive frozen from the time they retired or emigrated.

This means they will be locked out of the historic rise expected next year. The state pension will increase by inflation next April, which reached a 40-year high of 10.1pc in the year to July and is expected to rise further.

UK pensioners living in Britain, Europe and America are on track to receive a double-digit uplift next year, with the new state pension rising from £185.15 a week to £203.85 if inflation remains at this level in September, when the state pension rise is calculated. The basic state pension, which is paid to those who reached state pension age before 2016, would increase from £141.85 to £156.20.

But the average person living in countries where their state pension is frozen receives only £50.07 a week, just a quarter of the expected new full state pension in Britain next year.

John Duffy, who is chairman of the International Consortium of British Pensioners, a campaign group, said the “appalling” policy had gone on for far too long and that it was only right to support all UK pensioners during a global cost of living crisis.

He said: “It should make no difference whether a pensioner resides in Europe, or the Commonwealth, in Canada or the USA – we have all paid our dues, contributed to British society and deserve the right to live without financial burden in our final years.”

Patricia Coulthard, a 101-year-old who lives in Australia, has been locked into receiving the same state pension for more than 25 years and now receives less than a third of the full amount.

“I find it grossly unfair that the UK Government continues to cast aside British pensioners overseas who have contributed to making the UK the nation it is today,” she said.

Peter Sanguinetti, 83, who lives in Canada, said he faced the “terrifying prospect” of further financial hardship as prices are increasing rapidly. “Our living standards in retirement are rapidly diminishing and the Government doesn’t realise the harm it is doing to us,” he said.

British pensioners in Canada have faced further hardship this summer, as thousands have had their state pension suspended altogether after a "serious administrative error" which saw letters lost in the post. The Department for Work and Pensions has cut off pensions paid to British pensioners living in Canada, who were accused of failing to return “proof of life” forms the retirees claim they never received.

Other countries where the state pension is not increased every year include Japan, India, Pakistan, Thailand and Hong Kong.

Anyone moving to live in an EU country, or Switzerland, will receive a British state pension as they would if they had remained in Britain. The same policy also applies to a limited number of non-EU countries including America, Israel, Jamaica and Turkey.

Usually, the state pension rises every year by the higher of wage growth, inflation or 2.5pc. This "triple lock" policy has been temporarily suspended because of the pandemic but will return next year.

A spokesman for the DWP said: “We understand that people move abroad for many reasons and that this can impact on their finances. There is information on GOV.UK about what the effect of going abroad will be on entitlement to the UK state pension.

“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.”