Rishi Sunak grilled over plans for 8% pension rise
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State pension income increases every year under the triple lock for British retirees and this includes a number of people living abroad. For 2022, payments may rise by eight percent given the impact coronavirus may have on earnings rates.
Those living in the following locations will also see their payments rise:
- The European Economic Area (EEA)
- Countries that have a social security agreement with the UK
This list covers a broad range of regions but it should be noted retirees in Australia and Canada are not included.
The DWP has been urged to work with the Governments of these countries to include them in the list.
This would impact hundreds of thousands of British retirees based abroad but yesterday, the DWP refused to amend the rules.
Recently, Charlotte Nichols, the Labour MP for Warrington North, pushed the DWP for action in the Commons.
Ms Nichols said: “To ask the Secretary of State for Work and Pensions, whether she plans to remove the freeze and uprate on pensions of British-expats living in Canada.”
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On July 13, Guy Opperman, the Parliamentary Under-Secretary for the DWP, responded to this question.
Mr Opperman said: “The Government has no plans to change this policy.
“The policy on the up-rating of UK State Pensions paid overseas is longstanding and has been supported by successive post-war governments for over 70 years.”
This “freezing” of state pensions for expat retirees was addressed in late 2020, as the All-Party Parliamentary Group on Frozen British Pensions released an inquiry into the issue.
In December, the Group detailed the Governments from Canada and Australia, two countries with among the highest numbers of excluded British retirees, had submitted damning evidence which condemned the policy.
According to evidence examined within the report, both of these governments have confirmed a readiness and willingness to work with the UK Government to end this policy but emphasis was placed on the fact that the issue can be resolved by UK domestic legislation.
It was highlighted both Canada and Australia provide full state pensions to their pensioners who live in the UK, with the UK being the only country in the OECD to pay their pensioners differently based on where they live.
At the time, representatives for the Canadian Government issued the following statement: “Over the years, the Government of Canada has raised, and has sought to address, this issue with the UK, including by proposing the two countries negotiate a comprehensive social security agreement that would provide for the indexation of UK pensions.
“To date, UK officials have not engaged on this issue.
“As it has done in the past, the Government of Canada will continue to raise this issue with the UK through various channels, where appropriate.”
Despite these issues, it may prove to be the case that no retirees see an increase next year, with the steep rises placing the triple lock at risk of being removed.
When pushed on the triple lock, Rishi Sunak detailed the Government would take actions which were ultimately fair for “both pensioners and taxpayers”.
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