State pension to rise to up to £10,000 this year – but 500,000 people set to miss out | Personal Finance | Finance

Spread the love

The state pension is the bedrock of income for millions of people in retirement. However, for some it fails to be boosted by the triple lock – a policy intended to protect the state pension in real terms.

State pension increases are only permitted if a person lives in certain places.

While those who live in the UK should receive the payment without issue, it is expats who have chosen to live overseas for which this may present an issue.

Affected individuals are commonly known as ‘frozen pensioners’ due to the fact their state pension is frozen at the rate it was when they left an eligible country. 

The End Frozen Pensions Campaign has described the long-standing policy as an “arbitrary postcode lottery”.

It means those impacted will miss out on a record boost to the state pension, due in April 2023 as the triple lock returns.

READ MORE: Rishi Sunak’s plan for pensions may cause ’exodus’ for savers

The 10.1 percent boost was confirmed by Chancellor Jeremy Hunt in the Autumn Statement, to the delight of millions of older people.

Mr Hunt said the average state pension would get an “£870 increase” per year. 

The full new state pension is set to rise from £185.15 to £203.85 per week – working out as a total of approximately £10,600.20 annually.

While the older, basic state pension will increase from £141.85 to £156.20 per week – a total sum of £8,122.40 per year.

The state pension only increases each year if a person lives in: the UK, the European Economic Area (EEA), Gibraltar, Switzerland, and countries with a social security agreement with the UK – but not Canada or New Zealand.

Potential state pension age rise worries sick and injured workers [INSIGHT]
Interest rates on late payment to rise today [LATEST]
Rishi Sunak’s plan to cut inflation won’t ‘ease squeeze’ [ANALYSIS]

The All Party Parliamentary Group on Frozen British Pensions states more than 90 percent of those affected live in Commonwealth countries with close ties to the UK.

The group has argued the current policy is “unjust” and should be reexamined by the Government. 

A DWP spokesperson previously told “We understand that people move abroad for many reasons and that this can impact on their finances. 

“There is information on GOV.UK about what the effect of going abroad will be on entitlement to the UK state pension.

“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.

“We continue to uprate state pensions overseas where there is a legal requirement to do so.”

Leave a Comment