Frozen nest eggs: Elderly in Australia lose out as Britain plans massive pension rise

The British Government plans to reintroduce the state pension 'triple lock' - a policy which increases state pensions by inflation, average earnings or 2.5 per cent - whichever is the highest.

The triple lock was temporarily dropped because of COVID and it's reintroduction will likely mean a 10 per cent, or about 1000 British pounds, per year increase for age pensioners in the UK from April as the state pension will be determined based on September's CPI inflation - which was 10.1 per cent.

However, an estimated 500,000 retired Brits who live abroad will not receive any boost at all as their pensions are frozen in value at the rate they were at the date of retirement or emigration. Around four per cent of all recipients of the British State Pension and half the pensioners living overseas, are currently adversely affected by that government's frozen pensions policy.

Most British Commonwealth countries are included in the frozen list including Australia, Canada, South Africa, India and New Zealand, as well as British overseas territories such as the Falkland Islands.

Retired expats in the European Economic Area continue to receive annual increases to their state pensions as do those in a host of other countries with which Britain has a reciprocal agreement including the United States, the Philippines and Turkey.

The amount of a British state pension is based on compulsory national insurance contributions paid during the time a person was living and working in the UK. It can also be paid proportionally, to those people who went to the UK to work temporarily and paid national insurance contributions while they were there.

"The majority of affected pensioners live in some of the biggest Commonwealth countries, such as Australia and Canada," observes Nigel Green of independent financial advisory, asset management and fintech organization deVere Group, which has more than 80,000 expat clients.

"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.

"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."

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British Pensioners in Australia president Patrick Edwards urged British pensioners in Australia to raise the issue with their local federal politician and to join BPIA.

He said Families and Social Services Minister Amanda Rishworth was expected to speak with the All-Party Parliamentary Group on Frozen British Pensions in the UK which is working to unfreeze the frozen pensions.

The amount of a British state pension is based on National Insurance contributions during the time a person was living and working in the UK.

Ahead of the UK Budget on March 15, Mr Green is calling on Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to scrap the frozen pension policy.

"It's a national scandal that the UK government is intentionally neglecting its older people abroad, pushing many into poverty," he said.

"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."