Nearly half a million British pensioners living abroad are missing out on annual state pension increases enjoyed by UK residents, according to research by Interactive Investor.
These retirees, mainly based in Commonwealth countries, are excluded from the triple lock system that ensures it rises each year in line with inflation, wage growth or 2.5%, whichever is highest.
Under current rules, the payments are frozen at the level they were when a person leaves the UK unless they move to a country with a reciprocal social security agreement.
As a result, expats living in countries such as Canada, Australia, and New Zealand see their superannuation’s real value erode year by year.
A retiree who moved abroad in 2010 would have lost £25,832 in state allowance income over the past 15 years. Someone retiring outside the EU or the US in 2015 would have missed out on £13,162, the research shows. Looking ahead, workers retiring now could forgo up to £70,000 over the next 20 years if current policies remain unchanged.
Pensioners residing in the UK
In contrast, pensioners living in the UK saw their full state pension rise by 4.1% in April, bringing it to £11,973 per year.
Despite long-running campaigns calling for reform, successive governments have declined to change the policy. The Department for Work and Pensions (DWP) estimates that reversing the freeze could cost £940 million in 2024–25 and £4.59 billion over five years.
The International Consortium of British Pensioners argues that if superannuation were uprated only from the date a new deal is signed and not backdated, the cost would be just £307 million over five years, or around £60 million annually. By comparison, the UK’s total state pension bill was £138 billion in 2024–25.
The chair of the End Frozen Pensions campaign, John Duguid, called the issue a scandal and described the policy as “morally and politically indefensible.” He said many superannuitants were never informed they would be frozen and now face significant financial hardship.
One such case is Anne Puckridge, a 99-year-old war veteran who says she has lost £60,000 since moving to Canada in 2001. In December, she travelled 4,400 miles to Westminster to press her case, accusing Labour leader Sir Keir Starmer of ignoring retirees like her.
“Many superannuitants dream of spending their golden years abroad,” said Myron Jobson of Interactive Investor. “But it’s vital to understand how that move can significantly impact your state allowance.”
A DWP spokesperson responded: “People move abroad for many reasons and we provide clear information on how this can impact their finances in retirement.
“The policy on uprating state pays overseas has been in place for over 70 years, and we continue to apply it where legally required.”
