BLOG: The plight of expats on ‘frozen’ state pensions

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Pensions fairness has been steadily building as a significant issue over the past decade and, with a rapidly ageing and expanding retired population, it is likely to be a major demographic issue facing all political parties.
BLOG: The plight of expats on ‘frozen’ state pensions

We first saw ‘fairness’ come to light on the back of the Maxwell affair, following the theft by Robert Maxwell of much of the assets of the Mirror newspaper group’s pension scheme.

No sooner had we got to grips with that, than we had the effective collapse of Equitable Life and the impact on a more vociferous group of retired people.

In both cases the pensioners claimed it was unfair that someone, somewhere was not going to bail them out.

Broken promises

Whatever your opinion of either case, the basic premise is the same: for decades people paid into schemes they believed would look after them in their retirement, and they were let down.

They received a broken promise. The broken promise is the same argument being used currently by members of many public sector schemes who are faced with raised retirement ages and increased contributions.

I came across another less well-known example of unfairness in pensions that relates to the state pension at last month’s Pensions & Benefits show.

It is the plight of the 580,000 British citizens who have retired abroad, largely to commonwealth countries, who exist on ‘frozen’ state pension benefits.

The ‘frozen’ part refers to the fact the amount these expats receive is set at the level the state pension is when they leave the country. They do not receive any of the annual uplift in the payment. This has left people who departed the UK in the 1970s receiving £6 a week.


What is ‘unfair’ about the situation is many have paid full, or virtually full, national insurance contributions during their working lives in Britain.

Many have retired overseas to live with their children in the likes of Australia, Canada, or New Zealand. There are even some who fought in World War II who are living on these paltry sums.

To make the system more unfair, it is possible to retire to a handful of Commonwealth countries, or even the US, and receive an annually upgraded state pension, while not getting the annual upgrade in the vast majority of other countries.

And, of course, retiring to another EU country – France or Spain, for example – means the UK state pension is automatically increased.

A group of plucky expats has been working for the past few decades to get this situation changed, and estimates it would cost the government in the region of £600m, although the government challenges this figure.

The website could be quite useful. It highlights which countries the expats will still receive the annual increase in state pension.
Lawrence Gosling is editorial director at Incisive Media, publisher of His views are his own, send any comments to him at

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