12 March 2024 , 11:47
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The Department for Work and Pensions (DWP) has been slammed over the "immoral" policy which could see 400,000 pensioners at risk of being pushed into poverty.
Campaigners are urging the DWP to review its policy on state pensions for Brits who retire abroad. Currently, many are not eligible for any state pension rises and have their payments frozen at the rate they were paid upon leaving the UK. State pensions are due to increase in April by 8.5% over 400,000 will not see any increase in their payments.
The International Consortium of British Pensioners (ICBP) has published a new report which shares the warning for pensioners looking to move abroad and slams the Government’s defence of the “immoral” policy which “pushes” pensioners into poverty. According to the report - “Frozen Pensions: A Policy Overdue for Review” - figures used by the DWP on the cost of unfreezing pensions are based on a “false presumption”.
This is that all pensions would be uprated to the level they should have been had they never been frozen if the policy is changed however the group claims there is "no evidence" to support this assumption.
In its report, the ICBP cited a letter from the DWP to Sheila Telford, the group’s chair, from January 20, 2025. In this letter, the department said: "Where a bilateral [social security] agreement does include provision for uprating, […] the current level of state pension is uprated by the appropriate uprating mechanism, from the date that the agreement was signed”
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Based on this statement, the ICBP analysed what the cost of ending frozen state pension payments would be against the DWP’s estimate. The ICBP says the cost would come to £66million which is almost £864million less than the DWP's estimate of £930million for the 2025/26 tax year.
Over five years, the DWP has estimated the cost of abolishing the frozen state pension policy will be £4.59billion which is based on if pensions are uprated by the amount lost since being “frozen”. However, the ICBP estimates the price of this policy change would be £307million over five years which amounts to approximately £60million each year.
As such, the ICBP is lobbying the DWP to review its frozen pension policy and provide costings that factor in their statement that payments are “uprated […] from the date that the agreement was signed”.
Patrick Edwards, a board member of the ICBP, described the department’s policy as “immoral” and called for change. He said: “The figures that are used by the DWP to defend this indefensible policy are a complete fantasy that stretch credulity to breaking point.
“That these fantasy projections can be used to prevent an end to this injustice is immoral. Frozen pensions are not a parlour game for Whitehall but an everyday reality that pushes many frozen pensioners into poverty, denied the retirement they deserve and feeling abandoned by their own country.
“As history and the DWP’s own words make clear there is no question or chance of pensions being fully uprated, so it is high time that they stopped hiding behind flawed arguments and false figures and brought this shameful, indefensible and immoral policy to end once and for all.”
A Government spokesperson said: "Our priority is ensuring every pensioner receives the financial support to which they are entitled. We understand that people move abroad for many reasons and we provide clear information on Gov.uk about how this can impact their finances. The Government’s policy on the uprating of the UK State Pension for recipients living overseas."