60,000 State Pensioners Losing Long-Standing Payment Increases, Claims Labour Minister

An estimated 60,000 state pensioners, including many veterans, are losing out on annual payment rate increases from the Department for Work and Pensions (DWP), according to a claim by a Labour Party minister. This raises concerns over the so-called “frozen pensions” policy that affects nearly half a million British expatriates.

Since 2010, the UK state pension has been protected by the “triple lock” guarantee, which raises pension payments each year by the highest of three figures: inflation, average wage growth, or 2.5%. However, this annual uprating does not apply to an estimated 500,000 pensioners living overseas in countries that do not have reciprocal agreements with the UK. Many of these individuals retired decades ago but remain excluded from these increases.

This policy, often referred to as frozen pensions, disproportionately affects veterans and former civil servants who dedicated their lives to British society. A campaign group, End Frozen Pensions, describes the policy as a political decision and an “accident of history” that could be reversed through domestic legislation.

A DWP minister, Torsten Bell, defended the longstanding policy, stating: “The UK’s policy on the uprating of the UK state pension for recipients living overseas is a longstanding one. The UK state pension is payable worldwide without regard to nationality and is uprated abroad where we have a legal requirement to do so.”

Bell emphasized that priority has consistently been given to pensioners living within the UK when allocating additional benefits and expenditure plans.

For context, to qualify for the full state pension, individuals need at least 35 years of National Insurance contributions, while a minimum of 10 years of contributions is required to receive a reduced state pension. Pensioners can choose to have their payments deposited in a UK bank account or a bank account in their country of residence.

The ongoing debate highlights the challenges faced by British pensioners living abroad and renews calls for reform of the frozen pensions policy.