Skip to main content

Why does my expat pension not increase?

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

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o