Has your state pension been frozen since moving abroad? Did this cause you hardship or mean you have had to return to work in your later years? If you are interested in telling your story, get in touch with us via money@telegraph.co.uk.
The state pension is a crucial part of many people’s income in retirement. Currently claimed by around 12.7 million retirees, payments land in their bank accounts every four weeks.
It is not means-tested – everyone who builds up enough qualifying years of National Insurance contributions can secure a regular payment for life. This is particularly important for the more than one million pensioner households currently relying on it as their main source of income.
The state pension is also protected by the triple lock guarantee, which ensures it rises with the highest of inflation, wages or by 2.5pc. But not everyone benefits from this yearly uplift.
That is because they have a frozen state pension – and there are half a million Britons currently in this position.
Here, Telegraph Money explains why a state pension might be frozen, how to unfreeze it and what it all means for those affected.
- What is a frozen state pension?
- What are the countries where the UK state pension is frozen?
- How can I unfreeze my state pension?
- FAQs
What is a frozen state pension?
You usually need to build up at least 10 full qualifying years to get any state pension at all and at least 35 years to receive the full amount. Most people do this by paying National Insurance contributions, but there are other ways.
The state pension is paid worldwide, so you will receive payments regardless of where you decide to retire.
However, your payments will only increase each year if you live in certain countries. If you live elsewhere, your payment will remain the same as it was whenever you left the UK for the rest of your life – it will not rise with the triple lock.
This may mean it fails to keep pace with inflation and it could become worth a lot less over time.
What are the countries where the UK state pension is frozen?
If you live in the UK, Gibraltar, Switzerland or the European Economic Area – which is the EU plus Iceland, Liechtenstein and Norway – your state pension will rise every year because of the triple lock.
You will also get this increase if you live in a country that the UK has a social security agreement with, including attractive retirement destinations such as the Channel Islands, America and Barbados. You can see the full list of countries in the tool below:
However, this does not include Canada or New Zealand, even though they do have similar agreements in place.
If you live in any other country, such as Australia, South Africa or India, your state pension will be frozen. This means it will not increase unless you move to a country where the state pension increases are awarded.
Clare Moffat, of Royal London, said: “Where you retire has a big effect on your state pension and whether it increases. If you are thinking of moving abroad, the best thing to do is to check on gov.uk before you set your heart on a country to retire to.”
How can I unfreeze my state pension?
If you move to a country eligible for state pension rises for more than 183 days a year, your state pension will “unfreeze” and jump to the amount you’d be entitled to if you’d stayed in an eligible country the whole time.
It will also start to increase annually with the triple lock. However, this cannot be backdated, so any money you missed out on when you didn’t live there is lost.
For example, if you get the full new state pension but left the UK in 2020, you’d still receive state pension payments of £168.60 a week (the rate it was in 2020). But, if you moved back to the UK, or to another country where uplifts are provided, your pension would be increased to £221.20 a week, the full rate for 2024-25. You wouldn’t receive anything for the increases you missed.
If you spend more than half the year in an eligible country, you’ll still get annual increases even if you spend the rest of the time in one that isn’t.
When you decide to move to a different country, you should contact the International Pension Centre on 0191 218 7777 to report a change in circumstances as soon as possible.
If you’re visiting a country where rises are provided, even just for a short holiday, you can get your state pension increased for the time you’re there. There’s no minimum stay, but it’s only temporary and when you leave, it’ll return to the frozen amount.
You’ll need to apply for this within one month of the date you arrive in that country. The trip must include the normal day of the week that your pension is paid on, but it doesn’t have to be the actual date when you receive your pension.
So if you’re paid every fourth Monday of the year, you must be in that country for at least one Monday, but not necessarily a Monday when the state pension landed in your account. Again, you should contact the International Pension Centre.
A government spokesman said: “We understand that people move abroad for many reasons, and we provide clear information on gov.uk about how this can impact their finances in retirement. The International Pension Centre is a source of advice for people who are already retired.”
Frozen pensions FAQ
If I leave the UK now and I have already starting claiming the state pension, how much will I get?
You will receive the same amount as you get now and that will not change, unless you move to an eligible country.
Ms Moffat said: “If you are already receiving the state pension and moved abroad today, you would continue to receive your state pension of £221.20 a week.
“But it would remain at that level, putting you out of kilter in the future with friends and family in the UK of the same age, who would benefit from any increases through the triple lock.”
How much will I receive if I am already abroad when I retire and I do not live in a country where uplifts are provided?
You can still claim your state pension, but it will remain at the rate you got when you begin claiming it – unless you move to an eligible country that allows you to get uplifts in future years.
For example, if you live in Australia and have built up enough qualifying years to get the full UK state pension and claim it now, you will receive £221.20 a week. It will stay at that amount unless you move to a country where you are eligible for increases, regardless of how long you live.
What if I live part of the year in the UK or another eligible country and part of the year abroad?
You have to choose which country you want your state pension to be paid in. If you spend more than 183 days in a country eligible for the state pension increases, you can choose this one and your pension will rise.
What if I return to the UK and then leave again?
When you return, your state pension will be topped up to the full level for the duration of your time in the UK – but it will freeze again at that rate when you leave.
For example, if you claimed your state pension in January 2020 and left the UK for a country not eligible for increases, it would be frozen at £168.60 a week.
If you returned to live in the UK in 2024, you would start getting the current rate for 2024 to 2025, of £221.20. If you lived in the UK until 2030 and then left, your state pension would be frozen again at the 2030 rate.
If you visited or came to the UK temporarily, you would get £221.20 rate until you left, when it would revert to the rate you were getting when you initially left – £168.60.
If I deferred my state pension, will I still get the higher amount when I claim, or is it capped?
You are still entitled to the higher amount, regardless of where you live. But if you live in a country where uplifts are not provided, it would remain frozen at that level.
Can I still get pension credit?
If you leave the UK, your pension credit will stop regardless of which country you move to.
Does your state pension freeze if you go to prison or you die?
If you are convicted of a crime and go to prison, your state pension is paused. You will receive it again when you are released, but unless you were on remand and eventually not convicted, you cannot get back what you missed while incarcerated.
The state pension stops when you die, although if you are survived by your spouse, they might be able to inherit some of it.