Thousands of people who receive state pension payments could miss out on extra cash.
Many rely on the sum increasing by the triple lock mechanism which is the highest of 2.5%, inflation or average earnings. However, the increase is not guaranteed for everyone as there are eligibility rules to factor in.
These specifically relate to where a person decides to live, as this can impact the increases they can receive, reports The Express. The state pension only increases in the following places - The UK, European Economic Area (EEA), Gibraltar, Switzerland, and countries with a social security agreement with the UK (but not Canada or New Zealand).
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Living in other countries means individuals will miss out on the annual uprating of the state pension. This is true even for those who live in Commonwealth nations - former British colonies, of which many have close ties to the UK.
The End Frozen Pensions Campaign has described the policy as “unfair” to the hundreds of thousands of people who are affected. Taking to Twitter, the group said: "It is cruel and unfair to deny pensioners payment increases because they live in the ‘wrong’ country.
"520,000 recipients of the UK state pension overseas are denied the right to annual payment increases. As a result, their pensions are ‘frozen’ and fall in value each year. Having made National Insurance contributions throughout their working lives, these pensioners now face poverty and hardship."
Pensioners will see their state pension frozen for as long as they live in a country where increases are not permitted. Those who return to the UK can get their pension uprated to the full amount, becoming eligible for uprating again. However, the higher rate will only apply so long as they are in Britain.
The All-Party Parliamentary Group (APPG) on Frozen British Pensions say they believe the current policy is “unjust”, citing various reasons why. Firstly, the APPG references the contributory nature of the state pension, stating there is “injustice” for those who have paid their National Insurance contributions to guarantee a sum which is protected in real terms.
It also cites the “unequal application of the frozen pension policy due to increasingly anachronistic bilateral arrangements with some countries and not others”. The APPG says there is a severe financial and social impact borne by those who moved abroad historically and see their real terms income fall year on year.
Finally, the group sees the frozen pensions policy as a barrier to emigration, stating it impacts “ethnic minority communities with cultural links to the Commonwealth, adding a further layer of discrimination”.
A Government spokesperson previously told Express.co.uk: "This year we will spend over £110bn on the state pension and our priority is ensuring every pensioner receives all the financial support to which they are entitled. We understand that people move abroad for many reasons and we provide clear information about how this can impact on their finances.
"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."
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