No Plans To Address Ex-Pats State Pensions

24/07/2018

The government has no plans to allow policy increases for expats with ‘frozen’ state pensions, saying it would cost more than £500m per year to be corrected.

In a written answer to Parliament, Guy Opperman, minister for pensions and financial inclusion stated this was the cost the government would have to pay if all pensions in payment overseas were increased to current UK levels, and would increase further in future years.

Currently the majority of pensioners living in the UK have their state pension increased according to the triple-lock principle – by a minimum of 2.5 per cent, the rate of inflation, or average earnings growth, whichever is the highest.

But the same applies only to ex-pat pensioners living in certain countries, such as the US, all European Union countries, Barbados, Bermuda and Israel.

Pensioners living in countries such as Australia, Canada, New Zealand and South Africa have had their state pension frozen.

According to the all-party parliamentary group on frozen British pensions, 550,000 British pensioners, equating to half the pensioners living overseas, are currently adversely affected by the government’s frozen pension policy.

Mr Opperman stated: “It has been the policy of successive post-war governments for around 70 years – UK state pensions are payable worldwide and are uprated abroad where there is a legal requirement to do so, for example in the European Economic Area (EEA) and in countries with which we have a reciprocal agreement that provides for up-rating.

“We have no plans to change this policy.”

If you would like more information on end of year tax planning opportunities centred on your personal circumstances, please contact us >>

Written by Sam Gulley | Financial Planning Consultant

Sam joined Mantle Financial Planning in 2009 having previously been with Alexander Forbes and HSBC bank. Read more >>

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