State pension warning: Will your pension be frozen due to where you live? | Personal Finance | Finance
British pensioners who have moved overseas in retirement may see their state pension frozen in place. Over 500,000 people are believed to be receiving a frozen state pension.
A frozen pension means that while the state pension increases every year by at least 2.5 percent, some people are excluded from the income boost.
This means that as the cost of living rises over time, those who do not receive an annual increase to their state pension lose money in real terms.
Half of all British pensioners living overseas are impacted by a frozen state pension, according to the All-Party Parliamentary Group on Frozen British Pensions (APPG).
The issue affects four percent of all recipients of the state pension, according to the APPG.
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Britons who live in the following EEA (European Economic Area) countries do receive an increase to their state pension every year:
- Austria
- Belgium
- Bulgaria
- Croatia
- Cyprus
- Czech Republic
- Denmark
- Estonia
- Finland
- France
- Germany
- Greece
- Hungary
- Iceland
- Ireland
- Italy
- Latvia
- Liechtenstein
- Lithuania
- Luxembourg
- Malta
- Netherlands
- Norway
- Poland
- Portugal
- Romania
- Slovakia
- Slovenia
- Spain
- Sweden
The APPG is attempting to bring together parliamentary supporters in an effort to unfreeze frozen British state pensions overseas.
The APPG believes the current policy is unjust, based on the following factors outlined on its website:
“The contributory nature of that state pension, and therefore the injustice of the current situation for pensioners who have made NI contributions in anticipation of a state pension in their retirement, but for whom entitlement is so varied.
“The unequal application of the frozen pension policy due to increasingly anachronistic bilateral arrangements with some countries and not others.
“The financial and social impact on those who moved abroad historically, who have seen their real terms income fall year on year. This causes loss of independence, increasing dependency on families and in some cases forces people to return to the UK to live alone.
“The barrier to emigration impact of frozen pensions on those approaching retirement in the UK. This is increasingly impacting ethnic minority communities with cultural links to the Commonwealth, adding a further layer of discrimination.”
