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The announcement of a 4% increase in the state pension brought relief to many, but half a million pensioners already know they won’t benefit from this rise.
The triple lock mechanism, introduced by the coalition government in 2011, was designed to protect pensioners from inflation by guaranteeing an annual state pension increase based on the highest figure between inflation, wage increases and 2.5%. However, many pensioners have not seen any of these increases.
This is due to the freezing of the state pension for those who choose to spend their retirement years abroad. The roughly 500,000 Brits aged 66 and over currently residing overseas will not receive any of the £460 state pension increase due next April.
Sheila Wills, a British pensioner living in South Africa, spoke to The Telegraph about her situation. Her family settled in South Africa after living across the continent during her husband’s 40-year career in British overseas development aid.
Since his death in 2016, her only income has been the British state pension she inherited, which amounts to just £67 a week.
Receiving no additional support from either the UK or South African governments, she struggles to make ends meet. The 87-year-old revealed that her husband was never informed that his pension would be frozen if he chose to retire in a country without a reciprocal agreement.
In a heartfelt plea, one woman recounted: “My husband and I were of the generation that were born pre-war, we lived through the shortages, dangers and deprivations of the war years and were then the generation that went to work, to once again build Britain…I am now a widow, trying to survive on a pension that was considerably reduced after the death of my husband.”
A group of elderly Brits are pressuring the Prime Minister to scrap the controversial and “totally immoral” rule that robs them of their yearly pension increase, a policy firmly rooted in 1955.
Since British state pensions were allowed to be paid globally, the UK hammered out reciprocal update agreements with various countries, covering much of Europe and the USA. However, the Commonwealth isn’t on this list, forcing many UK pensioners to face the music without support.
Shockingly, around 40% of British retirees abroad are knocked by the lack of these deals, with nations like Australia, Canada, and New Zealand hosting over 80% of those with stagnant pensions. Interestingly enough, pensioners from Canada and Australia living in the UK enjoy the perk of annual pension hikes, thanks to a mutual arrangement between those countries.
The Labour Party’s manifesto, leading into the general election, made no mention of the contentious issue of frozen pensions. The debate on revising this policy is still rife, as raising pensioners incomes to the levels they would have had if their pensions had not been frozen could cost an estimated £4.59 billion from 2023 to 2028, according to Department for Work and Pensions (DWP) figures.
However, the International Consortium of British Pensioners contends that the true cost would be a mere £60 million a year, arguing that the increase should take effect from the day the policy is altered, with no back payments.
In response to inquiries, a DWP spokesperson stated: “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.”