State pension: Frozen pension issue to be addressed ‘shortly’ – but ‘no plans’ to change
State Pension payments ultimately vary according to a person’s National Insurance contributions, however, the full sum currently stands at £175.20 per week. The Triple Lock Mechanism ensures pensioners receive an increase each year by the highest of the following: 2.5 percent, inflation, or average earnings growth. Due to Brexit, there were concerns pensioners who retired overseas could miss out on the annual uprating.
The Government, however, confirmed those living in the EU, a European Economic Area (EEA) or Switzerland will still be able to claim their UK state pension, alongside countries which have a social security agreement with the UK.
It is worth noting, however, that pensioners who have retired to other countries will effectively have their state pension ‘frozen’ – that is to say, it will not increase in line with the UK when they live abroad.
Scrutiny of the matter and concern about the freeze had been building, and the issue was once again addressed, this time in the House of Lords.
Baroness Stedman-Scott, the Parliamentary Under Secretary of State at the Department for Work and Pensions (DWP) firstly commented on the matter.
READ MORE: State pension claim numbers fall amid age changes – pension warning
“But they’ve had no reply, no response. When will the Government respond? And can the minister assure us it will be a positive response which will help pensioners in Canada and Canadian pensioners here?”
Baroness Stedman-Scott responded by stating the Government was “impatient” to resolve the issue further.
In her responding remarks to questions from the House, she said: “The Government has received the request from Canada in November 2020 to conclude a reciprocal agreement to include indexation of pensions.
“The Government will be responding to Canada shortly. The UK Government has continued to honour its legal obligations in relation to paying pensions and uprating overseas.
“As it stands at the moment, while I realise this will be disappointing, we have no plans to change that policy.
“When people retire to different countries, the information of what their pension impacts are made very clear to them.”
Recently, Guy Opperman, Parliamentary Under-Secretary for the DWP, also commented on the matter.
He told the Commons the DWP had not had any recent discussions on the frozen state pension issue.
However, he did state the department planned to respond to the request from Canada for a reciprocal social security agreement.
An inquiry undertaken by the All-Party Parliamentary Group on Frozen British Pensions asserted 510,000 UK pensioners are currently living on a “frozen” pension.
Of these, the report stated, 150,000 live in Canada, and an additional 230,000 are based in Australia.
The inquiry condemned the fact those retiring abroad would not see their state pension sum boosted each year.
It called for a Government review of the current policy, and for action to be taken on reciprocal social security agreements.
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