77-year-old Jon Goldman calls to end frozen UK pensions
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The state pension increases every year due to the presence of the triple lock policy. However, some Britons will be excluded from receiving extra weekly income if they live overseas.
Many pensioners who retire abroad find that from the moment they leave the UK, their weekly state pension will not increase any further.
Only certain countries have an agreement with the UK which means the state pension is uprated in the same way it would be for those who do not live in a foreign country.
This includes countries which are in the European Economic Area (EEA), which is all the countries within the EU, plus Iceland, Liechtenstein and Norway.
Pensioners living in Gibraltar or Switzerland will also receive their normal yearly boost, as well as a number of other nations which have a social security agreement with the UK.
These are Barbados, Bermuda, Bosnia-Herzegovina, Guernsey, the Isle of Man, Israel, Jamaica, Jersey, Kosovo, Mauritius, Montenegro, North Macedonia, the Philippines, Serbia, Turkey and the USA.
However, state pension age Britons who live in countries such as Australia, Canada and New Zealand will not get any additional state pension each year. Their income will stay locked in place at the rate when they left the UK.
As the cost of living rises over time, this means many people could be losing money in real terms every year if their state pension does not improve.
The campaign group End Frozen Pensions believes there are more than half a million people impacted by this, and have started a petition on their website, calling on the Government to put an end to what they call a ‘cruel policy’.
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The UK’s triple lock policy ensures that the value of the state pension is increased each and every year in order to keep up with the cost of living and to allow pensioners to retain their spending power over time.
At present, the full new state pension is worth up to £179.60 per week, while the basic, or old state pension has a maximum value of £137.60.
This provides a yearly income of £9,339.20 for the full new state pension and £7,155.20 for the basic version.
The new state pension is available to Britons who reached state pension age on or after April 6, 2016.
Three different metrics are used to determine by how much the state pension will increase, with the highest percentage being used each year so pensioners get the maximum boost possible.
These three figures are: the rate of inflation, average earnings growth, and 2.5 percent.
The next increase will come in April 2022, as the state pension will rise by 3.1 percent, in line with inflation for the 12 months to September 2021.
This will add £5.55 a week to the full new state pension, or £288.60 for the year. The full basic state pension will rise by £4.25 per week, or £221 for the year.
Under the traditional triple lock, the state pension was set to rise by more than eight percent, as average earnings growth ballooned to unusually high levels.
However, the Government believed that this was an anomaly caused by a huge number of people returning to work after being on furlough previously.
The decision was therefore taken to temporarily remove the earnings link from the triple lock policy for the 2022/23 tax year, restoring it from 2023/24.
This meant pensioners were denied a record-breaking increase.
A DWP spokesperson 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 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.”
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