State pensioners will lose £4,900 to DWP 'depending on where they live'

453,000 UK pensioners living overseas receive an average of just £3,000 in annual state pension payments - nearly £4,900 less than retirees who remain in the UK.

450,000 pensioners will miss out on a Triple Lock boost and lose £4,900 in state pension payments each year. 453,000 UK pensioners living overseas receive an average of just £3,000 in annual state pension payments - nearly £4,900 less than retirees who remain in the UK.

The state pension increases every April in line with the triple lock promise. The triple lock was introduced in 2010 and makes sure the state pension rises by whichever is highest out of: inflation (using the previous September rate of Consumer Prices Index inflation), wages (average growth between May and July), or 2.5%.

But there are several popular retirement destinations where the state pension does not get increased. This includes Australia, New Zealand and Canada. The most recent figures show there were just over 450,000 people living overseas who were not getting state pension increases in March 2023.

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Peter Sanguinetti, an 85-year-old British expat in Canada, left the UK in 1984 and discovered his state pension was frozen at £72 per week when he began drawing it in 2009. He said: "Should it really be necessary at the age of 80 to have to work solely to replace that missing part of my state pension which the UK Government steals from me every day?"

he estimates he has lost £29,000 due to his frozen pension. Myron Jobson, Senior Personal Finance Analyst at interactive investor, warned: "If you're planning to retire in a country where the UK state pension is frozen, it means you won't benefit from the annual increases that help keep up with inflation, and as such, your payments will decline in real terms throughout your retirement."

Jobson continued: "Those contemplating retirement overseas should plan well in advance to ensure they’re able to enjoy a comfortable retirement. It is important to understand the state pension rules of the destination country.

"Those facing a frozen state pension might need to make extra contributions to their private pension or other retirement savings to offset the financial impact of the lack of uprated payments. By boosting your pension pot now, you can help ensure a more secure and comfortable retirement, regardless of where you choose to settle. Even modest increases can compound significantly over time to provide a boost to retirement funds."