More than 500,000 recipients of the UK state pension living abroad do not benefit from the ‘triple-lock’, the Department for Work and Pensions has said.
The triple lock, introduced by the Conservative and Liberal Democrat coalition government, increases the state pension payments each year by the highest of average earnings, CPI inflation or 2.5 per cent.
The policy on increasing UK state pensions for overseas residents is that the annual index-linked increases are paid outside the UK only where there is a legal requirement to do so.
The majority of those affected by the freeze live in Australia, Canada and New Zealand.
Increasing state pensions for these people would cost the government £3bn over the next five-years, according to the DWP.
AJ Bell senior analyst Tom Selby says: “Over half a million people are understandably furious that, having paid into the system and retired abroad, they find their state pensions frozen.
“Over the course of someone’s retirement this could have a huge impact, potentially costing more than £50,000 in state pension income. For many this might be the difference between living comfortably and struggling to make ends meet.
“Unfortunately for those affected there is no sign of a reprieve, with successive governments rejecting calls to rethink the policy and preferring instead to focus resources on those who choose to remain in the UK.”
To discuss your own state pension entitlement, please contact your usual Mantle consultant or email@example.com