DWP Confirms Controversial Rule Affecting 450,000 State Pensioners Abroad

The Department for Work and Pensions (DWP) has reaffirmed its longstanding policy that results in nearly half a million state pensioners having their pensions frozen when living abroad. This issue has drawn increasing attention as pensioners residing in countries without reciprocal pension uprating agreements face the reality of their income failing to keep pace with inflation.

Labour Party Pensions Minister Torsten Bell highlighted the predicament faced by these pensioners, exposing how many receive no annual cost-of-living increases while living overseas. Mr. Bell stated, “The UK’s policy on uprating State Pensions for recipients living overseas is a longstanding one. The pension is payable globally regardless of nationality but is only increased where there is a formal legal agreement in place.”

This approach, maintained by successive governments, prioritizes pension uprating for those living within the UK, leaving pensioners abroad disadvantaged. The End Frozen Pensions Campaign estimates over 400,000 pensioners suffer from this ‘frozen’ pension policy, most residing in Commonwealth countries lacking reciprocal agreements with the UK.

One poignant example is Anne, a 99-year-old Second World War veteran and former UK worker until age 76, who receives a frozen pension. Since moving to Canada to be closer to family, her weekly pension has remained stuck at £72.50, failing to rise with inflation. By contrast, pensioners remaining in the UK now receive £156.20 per week, illustrating the significant financial disparity caused by the frozen pension rule.

The campaign calls the situation “astonishing,” drawing attention to the unfairness felt by thousands of pensioners who contributed to the UK’s National Insurance system throughout their working lives but are left behind by policies that do not adjust their pensions fairly when living overseas.