Hundreds of thousands of British pensioners abroad are going to miss out on the financial boost from the return of the state pension ‘triple lock’, warns the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The warning from Nigel Green of deVere Group, which has more than 80,000 expat clients, comes as the government prepares to reintroduce the so-called triple lock in April (the start of the new tax year) which is expected to increase state pensions by around 10%.
The triple lock policy is a government commitment, which was temporarily dropped due to Covid implications, to hike state pensions by inflation, average earnings, or 2.5%, whichever is highest.
Pensioners will see double-digit payment increases in April this year as the state pension will be determined based on September’s CPI inflation – which was 10.1%.
The deVere CEO notes: “Clearly, this is good news for many retirees as it could mean a financial boost of around £1,000 a year.
“However, not everyone will benefit. An estimated 500,000 retired Brits who live abroad will not receive any boost at all.
“Outrageously, they will continue to have their pensions frozen in value at the point of retirement date or date of emigration.
“Having a frozen pension means that your retirement income falls in real terms year on year due to inflation – and never has this been more true than as the cost of living has soared.”
Retired expats in the European Economic Area (EEA) will continue to receive annual increases to their state pensions under the triple lock scheme, as will those in a host of other countries including the United States, the Philippines and Turkey.
“The majority of affected pensioners live in some of the biggest Commonwealth countries, such as Australia and Canada,” observes Nigel Green.
“Despite paying taxes all their working lives in the UK, and the national insurance in full, these Brits will completely miss out on the rise given to others.
“It seems completely unjust that someone living in the U.S. will receive an extra £1,000, yet someone just across the border in Canada, in the same situation, will not.”
Ahead of the UK Budget on March 15, the deVere CEO is calling on Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to “scrap the policy of penalising 500,000-plus British pensioners” – including many retired doctors, nurses, police officers, teachers and other public sector workers – by denying them annual inflation adjustments “solely on the basis of where they have chosen to live in retirement, which is their free choice to make.”
He concludes: “It’s a national scandal that the UK government is intentionally neglecting its older people abroad, pushing many into poverty.
“These retirees held up their end of the deal by fully contributing to the system when in the UK. The government must now do the right thing and uphold their side too.”