As an expat living in Sydney my British pension has stayed the same even though our cost of living has increased.
It was our choice to leave the UK on retirement but I had paid national insurance all my working life up to the age of 65 in Britain and expected the pension to keep pace with other UK allowances. Via email
Pension freeze: Move to certain countries like Australia in retirement and your state pension will not rise.
Linda McKay of This is Money replies: I hope at least you are enjoying the Australian summer, you may have heard that here in UK it is raining...again.
With regards your query at present those who have paid national insurance contributions in UK then emigrated to countries such as Australia and Canada will not receive annual increases to their basic state pension.
For example a 65-year-old Briton who retired in 2011 and moved to Australia received a maximum £97.50 basic state pension. When that person hits 82 in 2028, their state pension will still be £97.50.
In the March 2012 Budget the Chancellor George Osborne confirmed that from 2016 UK pensioners will receive a flat-rate state pension, initially worth £140 a week for those with a 30-year national insurance record.
So the gulf widens even further as inflation in the country of your choice eats into pension purchase power.
More... Staff who work beyond 65 'should still pay National Insurance to help young Middle classes hit by £400 stealth rise in National Insurance payments State pension for people living abroad: where your payments will go up and where they will be frozen How to plan for a richer retirement: A guide for your 30s, 40s, 50s, or 60s
For those expats who chose to live in the US or within the European Community it is a different story. Their incomes rise by about 2.5 per cent each year just as if they had stayed in UK.
Some countries such as Australia, Canada and New Zealand do not have reciprocal agreements with the UK leaving expats in these countries with frozen pensions.
The Government is under pressure to change its policy of 'freezing' state pension payment to Britons who retire to these destinations. Of the 1.18million people who receive the state pension who live outside the UK an estimated 565,000 do not have their incomes increased.
The Government has so far resisted change on the grounds of cost. It estimates that the annual bill for upgrading existing frozen pensions would be £655million and that this is considered ‘unaffordable’ in the current austere climate of cutbacks.
It has been suggested that some of this cost of upgrading the frozen pensions could be offset.
A report by Oxford Economics showed that expat pensioners saved the UK about £2.3billion a year by not using the NHS or being a drain on social care.
It also suggested that if there were ‘pension parity’ there would be an increase in the numbers possibly emigrating to the current frozen countries resulting in a further possible saving to British economy of £7.2billion by 2031.
The International Consortium of British Pensioners adds: We surveyed our members and are in the process of collating up to 3,000 responses and expect to uncover more cases like your reader which highlight the injustice currently experienced by these pensioners.
We aim to step up our campaign and will continue to lobby the Government on this issue of pensioners in poverty.
Anyone retiring or approaching retirement should consider the impact the move could have on their future state pension entitlement.
The UK pension is payable worldwide but is only increased annually where there is a legal requirement or reciprocal agreement.
The countries where pensions are up-rated
This is the list of countries where pensions rise to cover the cost of living. All others are frozen.
All EEA Countries and Switzerland Barbados Bermuda Bosnia-Herzegovina Croatia Guernsey Isle of Man Israel Jamaica Jersey Mauritius Montenegro Philippines Serbia Turkey United States of America Former Yugoslav Republic of Macedonia