Veteran Vic Williams calls for end frozen state pensions in 2013
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The triple lock, a measure which guarantees the state pension rises by the highest of 2.5 percent, inflation or average earnings, was temporarily suspended this year. However the Government has now confirmed the triple lock will make a return next year.
The state pension rose by 3.1 percent a year in April and with the triple lock being restored, it is predicted that it could rise 10 percent in the next year.
Those receiving a full state pension of £9,628 can expect an increase of almost £1,000 as the inflation rate is due to hit 10 percent in September.
This could push the state pension to around £10,600 a year in the 2023/24 tax year.
Despite the increase promised for many pensioners, it’s estimated 500,000 people will miss out on this.
But many British expats living overseas miss out on these increases due to an issue called the frozen pensions policy.
The state pension increase is only available if a person lives in the following countries:
- The UK
- The European Economic Area (EEA)
- Certain countries with a social security agreement with the UK (but not Canada or New Zealand).
This means that Britons who choose to retire overseas may risk missing out on annual state pension increase
These people can miss out on significant state pension increases over time, as they only get paid a pension at the rate they had when they first retired.
Someone who retired to a country like Canada in November 1980 would have lost out on £110,995 in state pension over time, according to the Canadian Alliance of British Pensioners (CABP).
This is because their state pension would be frozen at £27.15 a week – £114.70 less than if they had stayed in the UK.
Currently, there is only one way for Britons to change their circumstances in this sense.
The Government website explains: “Your pension will go up to the current rate if you return to live in the UK.”
The sum will change for those who come back to the UK to visit.
They should receive an uprated state pension while they are in the UK, however they will have their amount frozen again once they leave.
As the cost of living rises over time, people who have a frozen state pension will lose money in real terms as their state pension becomes less valuable.
The campaign group End Frozen Pensions estimates there are more than half a million pensioners impacted by a frozen state pension.
Many of the pensioners affected have said they were not aware their state pension would not increase once they moved abroad.
Britons will get yearly state pension increases if they retire in countries such as the US, any country in the European Union, Jamaica, Bermuda and Israel.
The International Consortium of British Pensioners chairman John Duffy said: “This outrageously cruel policy is excluding pensioners, many of whom spent their working lives in the UK, and leaving them to face poverty.”
Britons concerned about their pension being impacted can find out more by contacting the International Pension Centre.
They are likely to provide further guidance on the matter.
The Department for Work and Pensions (DWP) previously told Express.co.uk that it understands people move abroad for many reasons, and the fact this can impact their finances.
A spokesperson added: “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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