During the Autumn Statement a couple of weeks ago, Chancellor of the Exchequer, Jeremy Hunt, promised that pension payments would go up by 10.1% starting from April next year. This rise in pension payments ensures that pensions keep pace with inflation, raising the total rise by £14.85 per week.
However, around half a million UK pensioners won’t receive and benefit from the UK’s largest state pension increase just because they live abroad in a country that does not have an uprating agreement with the UK. When a pensioner moves to one of these countries, the government automatically freezes their pension payments at the level they were at when they left.
This news comes despite the UK Government pledging to keep the triple lock and Prime Minister, Rishi Sunak, promising that retirees will be at the forefront of his mind.
What is the triple-lock pledge?
In 2010, the UK government introduced a ‘triple lock’ to the UK state pension to ensure that state pensions would not lose value and increase at least in line with inflation. To make the guarantee even more secure, it included three measures of inflation.
The three-way guarantee was that each year, the state pension would increase by the greatest of the following three measures:
- Average earnings
- Prices, as measured by the Consumer Prices Index (CPI)
- 2.5 per cent
How might this affect you?
If you’re an expat living in countries like New Zealand, Canada, India, Thailand and South Africa, you will unfortunately be excluded from the yearly state pension increase.
It’s worth noting that expats can get their state pension uprated to the current rate if they return to the UK (even if only temporarily), but unfortunately many elderly pensioners cannot afford to make the journey due to health reasons and potential travel expenses.
In some unfortunate cases, World War 2 veterans who now live abroad in Commonwealth countries such as Australia and Canada are receiving as little as £25 per week – despite contributing to UK national insurance throughout their lives.
John Duffy, Chairman of the International Consortium of British Pensioners, said: “These pensioners have suffered discrimination from the UK government because of their new country of residence.”
What to do next?
Brite Advisors can only deal with private and company pension transfers and cannot help with state pensions. However, if you are an expat living abroad who does want to transfer your private pension overseas to your new country of residence, you can contact Brite Advisors here.