State pension: 500,000 Britons set to lose up to £6,000 this year despite 10.1% rise | Personal Finance | Finance

State pension payments will rise by 10.1 percent under the triple lock from April to help millions of older people with the cost of living. However, new figures have shown many could miss out on up to £6,000 this year.

The reason behind this is what is known as the frozen pension policy, which impacts British pensioners who have moved to certain countries overseas.

The state pension is only guaranteed to be uprated in the following places:

  • The UK
  • European Economic Area (EEA)
  • Gibraltar
  • Switzerland
  • Countries with a social security agreement with the UK (but not Canada or New Zealand).

While an inflation-linked state pension is welcomed by many pensioners, an estimated 500,000 will miss out on this increase due to not living in an eligible country.

For these pensioners, payments are “frozen”, falling in real terms year on year.

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New figures compiled by End Frozen Pensions have illustrated the impact on expats.

The increase to a weekly rate of £156.20 for the basic state pension and £203.85. for the new state pension will mean that a ‘frozen’ pensioner, who has made the full contributions, will miss out on:

  • £2,394.60 if they retired in 2013
  • £4,095.00 if they retired in 2003
  • £5,306.60 if they retired in 1993
  • £6,351.80 if they retired in 1983.

The lifetime losses of a ‘frozen’ state pension who has made contributions in full, would be as follows:

  • £10,098.92 if they retired in 2013
  • £35,529.52 if they retired in 2003
  • £66,245.52 if they retired in 1993.

World War II veteran Patricia Coulthard, who is turning 102 years old this year, cared for troops evacuated from Dunkirk and at the Battle of Kohima.

She moved to Australia in the early 1990s to be closer to her two children, but now receives £46 per week – less than a third of the state pension she would otherwise be entitled to.

The End Frozen Pensions Campaign estimates the cost of living in Australia is, on average, 25.7 percent higher than in the UK.

Ms Coulthard said: “As I am once again left with a pension frozen at just £46-a-week, my belief that the UK Government sees me, and frozen pensioners just like me, as undeserving of a liveable pension is reaffirmed.

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“Similar to the UK, the cost of living in Australia has been increasing, yet my British state pension is frozen in time, forced to stretch further and further to cover the cost.

“I have been deserted by the UK Government in my retirement, left to depend on the kindness of Australia.

“As I approach my 102nd birthday it would be lovely to think that the UK government might finally end this gross unfairness, but I’m not sure it’s going to come true in my lifetime.”

David, 90, and Pam, 83, both receive a frozen UK state pension because they now live in South Africa.

David previous served in the Royal Navy, spending 10 years in Korea, Malaya, the Suez Conflict and Cyprus.

The couple claims they were not told their pensions would be frozen, despite making voluntary contributions while in South Africa.

They were forced to sell their home and many of their possessions in 2016.

The couple said: “The ‘frozen’ pension policy has caused us a retirement filled with distress. We watch from afar as those in the UK and other countries such as Switzerland, Jamaica, Israel, France, Gibraltar, the US receive a much needed increase to their state pensions, whilst we are excluded on the basis of being in the wrong country, the losers of this postcode lottery.

“Without the increases, and with growing medical bills, it is hard not to feel outrage as we are treated like outcasts by a country we lived and worked in for much of our lives.”

A DWP spokesperson told “Our priority is ensuring every pensioner receives the financial support to which they are entitled. We understand that people move abroad for many reasons and we provide clear information about how this can impact on their finances.

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

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