State pension: Man, 77, has retirement sum frozen for 12 years | Personal Finance | Finance
State pension increases are not guaranteed, as a person has to live in certain countries to receive the increase. It means those who choose to live overseas in countries not covered by an agreement will have their state pension frozen.
Eligible countries for a state pension increase are:
- The UK
- European Economic Area (EEA) countries
- Gibraltar
- Switzerland
- Countries with a social security agreement with the UK (but not Canada or New Zealand).
Consequently, many expats are now reckoning with the fact their state pension will not increase in the coming year.
This is the case for Hugh Smith, 77, who currently lives in South Africa, but was born and raised in Manchester.
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Mr Smith told the End Frozen Pensions campaign: “Inflation, as we all know, is the killer.
“No matter what your monthly expenses, or the category of expenses, whether this is groceries, medical aid contributions or local council taxes and rates – everything rises annually.
“This is all while your frozen pension remains just that: frozen.”
Mr Smith explained he had no idea his state pension would be frozen due to him living abroad.
He was only told this detail when he received his letter at 65 years old, advising him he would get a state pension.
He added: “I was never told that when I first enquired to do catch-up.
“I’d been living in South Africa for about two years when a colleague advised me to pay my arrears, which I did.
“But at no stage was I told that I would have a frozen pension.”
The End Frozen Pensions campaign estimates there are roughly 500,000 British expats affected by this policy.
It is one which has spanned across numerous governments for decades.
However, people like Mr Smith have stressed this approach needs to change.
He added: “The UK needs to practice what it preaches.
“They claim to be one of the world’s leading democracies, they are always telling us how fair, honourable and non-discriminatory they are.
“But it’s a very hollow claim, when you consider the way it treats many of its overseas pensioners.
“So, in fact, the UK needs to do the honourable thing and treat all of its pensioners equally.”
A Department for Work and Pensions (DWP) spokesperson previously told Express.co.uk: “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 up-rating 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.”
