Half a million elderly will miss out on the 3.1 percent increase because they live in a country without a reciprocal social security deal with the UK. For these pensioners, their payments are ‘frozen’ and fall in real terms year on year, despite having paid in the same dues and contributions. The increase to a weekly rate of £141.85 for the Basic State Pension and £185.15 for the New State Pension will mean that a ‘frozen’ pensioner, who has made the full contributions, will miss out on £7,919,60 if they retired in 1982.
And they will lose £4,040.40 if they retired in 2012, £5,701.80 if they retired in 2002 and £6,812.00 if they retired in 1992.
Campaigners say the policy of freezing pensions depending on which country the person lives in is a ‘cruel ‘postcode lottery’.
John Duffy, chair of the International Consortium of British Pensioners, said: “Although we welcome the rise in UK pensions, we are hugely disappointed that the UK Government is continuing to treat British citizens living in an arbitrary list of countries unfairly.
“This outrageously cruel policy is excluding pensioners, many of whom spent their working lives in the UK, and leaving them to face poverty and financial hardship.
“The UK Government could choose to end this policy now but instead continues to treat British pensioners across the world unequally, despite the contributions they have made to the UK.
“We hope Ministers will engage in future discussions to end this policy and give all UK pensioners the support they are entitled to, no matter where they live.”
MPs and Peers from Parliament’s All-Party Group on Frozen British Pensions have also warned that the policy drives British pensioners overseas into poverty.
All UK pensioners with national insurance contributions are entitled to a British state pension regardless of where they live.
But 492,000 elderly people are impacted by the Government’s ‘frozen’ pensions policy.
Ninety percent reside in Commonwealth countries and many live in overseas British Territories such as the Falkland Islands.
And in November 2020, the Canadian Government formally requested to create a reciprocal agreement to end the frozen pensions policy affecting around 150,000 UK pensioners living in Canada.
This was rejected by the British government.
Patricia Coulthard, a 100-year-old British pensioner living in Australia, said: “Since I moved to Australia to be closer to my children in my retirement, my pension has been frozen at just £46 per week.
“I am now nearly 101-years old and, having been born in Britain and served as a nurse in World War Two, it saddens me to think the UK Government does not believe I am entitled to the same support as other British pensioners living overseas.
“Had I moved to a country such as the USA, my pension would have increased throughout the years, but as I moved to Australia, I am excluded from these much-needed increases.
“I hope the Government will finally put an end to this injustice.”
A spokesperson for the Department of Work and Pensions said: “We understand that people move abroad for many reasons and this can impact on their finances.
“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 uprating 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.”