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Daily Mirror
Daily Mirror
Business
Sam Barker

State pensioners say ‘cruel postcode lottery' means 500,000 miss out on 10.1% boost

State pensioners are protesting a policy which means 500,000 miss out on a 10.1% increase to the retirement benefit next year.

The state pension will rise by this figure next April after an announcement from Chancellor Jeremy Hunt in his Autumn Statement last week.

But many British expats living overseas miss out on these annual state pension increases due to an issue called the frozen pensions policy.

British citizens who live overseas in countries like Australia and Canada have their state pension frozen at the level they had when leaving the UK.

If they had stayed in the UK their state pension would go up every year thanks to the triple lock.

Expat state pensioners took their fight to the DWP this week (In Pictures via Getty Images)

This sees the state pension rise annually by inflation, 2.5% or average wage growth, whichever is highest.

Inflation was 10.1% in the qualifying month of 2022/23, meaning a bumper increase to most state pensions in 2023/24.

But 492,000 British expats live in countries where their state pension is frozen - that's half of all Brits living overseas.

Groups of affected state pensioners protested outside the Department for Work and Pensions (DWP) headquarters this week over the issue.

Sheila Telford, director of the International Consortium of British Pensioners, which runs the End Frozen Pensions campaign, said: “We are delivering our representations to the Department for Work and Pensions on behalf of frozen pensioners around the world.

"These letters highlight the financial and mental hardship caused by this cruel postcode lottery.

“British pensioners are losing thousands of pounds every year and as inflation rises the policy will cause further suffering.

“We hope the Department for Work and Pensions will read these letters and work with affected countries to resolve this issue for good.”

The DWP has been approached for comment.

State pensioners with frozen pensions have mounted five legal challenges over the issue since 2002.

Countries where yearly state pension rises don't apply include Australia, Canada, South Africa, New Zealand, India, Pakistan, Bangladesh, Africa and many Caribbean islands.

A Brit who retired to a country like Canada in November 1980 would have lost out on £110,995 in state pension over time, according to the Canadian Alliance of British Pensioners (CABP).

This is because their state pension would be frozen at £27.15 a week - £114.70 less than if they had stayed in the UK.

Someone who reached retirement age in April 1990, for example, would have lost out on £72,894 in state pension if they lived in one of these countries ever since.

An expat Brit who retired in April 2000 would be short £42,461 in the retirement benefit.

Brits will get yearly state pension increases if they retire in countries like the US, any country in the European Union, Jamaica, Bermuda and Israel.

The full 'old' state pension is £141.85 a week, for Brits who retired before April 2016.

The 'new' state pension, for people retiring after that date, is £185.15.

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