Expats Miss Out On Latest State Pension Increase

The State Pension will go up 2.9% to £119.30 a week from April 6 next year, the government has announced.

But once again thousands of expat pensioners will miss out on the increases because their pensions are not index-linked.

Instead, their pay outs will stay locked to the amount paid on the first date they drew their pension.

The lock out from increasing the state pension in line with cost of living applies to British state pensioners living in 120 countries outside the European Union – including many in The Commonwealth, such as the popular retirement destinations of Australia, Canada and New Zealand.

Expat forums and blogs estimate that 560,000 expat pensioners do not receive state pension increases – around 5% of all British pensioners.

State pension pay out frozen at £30 a week

A similar number who have immigrated to Europe or other countries where the state pension is index linked.

According to the International Consortium of British Pensioners, a lobby group campaigning for a fairer deal on expat state pensions, some pensioners are paid just £30.

The fight has carried on for more than 20 years and includes legal challenges lost in UK courts and at the European Court of Justice.

“The unfairness is a pensioner can sit one side of the border between the US and Canada and receive £119 a week, while another sitting just yards away in Canada is paid £30,” said a spokesman for the group.

“The difference is the US government has a reciprocal agreement with the UK while Canada has not.”

Triple lock sees above inflation increase

The rules have nothing to do with how much an expat may have paid in to the welfare system while they lived in the UK, but where they choose to live once they emigrate.

The above-inflation increase is due to the government’s ‘triple lock’ that ensures the pension rises in line with the highest of annual inflation, wage increases or a minimum 2.5% measured for the 12 months to September each year.

In 2015, wages were up 2.9% in the year.

The increases will take state pension spending up to £95 billion next year – just shy of the £101.5 billion the government will spend on the National Health Service in 2016.

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