Pensioner forced back to work in his 80s after frozen pension became ‘worthless’ | Personal Finance | Finance

Since moving abroad in 1984, Peter Sanguinetti has lost around £23,000 of pension income because his payments have not risen in line with rising costs and wages.

British expats who move abroad are often left with “frozen pensions” because their pensions do not grow in line with inflation or the cost of living.

Those relying on these frozen pensions, the vast majority of whom live in Canada, Australia and New Zealand, are not covered by the “triple lock”, which ensures UK pensioners are protected from inflationary pressures .

Before moving to Canada, Mr Sanguinetti had a dedicated state pension for his work in the rope making industry and through his years of National Service with the Royal Hampshire Regiment, a post through which he worked overseas.

He estimates he has lost £23,000 because his pension has been fixed despite inflationary changes over the years.

He finally got to drive school buses in his 80s, before Covid meant he couldn’t continue.

In the UK, the triple lock ensures that the state pension rises each year in line with the highest pay, the rate of inflation or 2.5 per cent.

With the state pension due to rise again by 8.5 per cent next year, half a million overseas pensioners will lose this upgrade.

Mr. Sanguinetti said The Telegraph: “My wife and I were worried about the move and we thought about it carefully before committing, we researched schools and housing and other basic needs.

“But in terms of the implications the move would have on my pension I had no idea what was in store for me.”

The latest official figures show that around 480,000 state pension recipients live in countries where payments are not growing in line with rising costs and wages.

A petition calling on state pensioners whose payments have been frozen to have their payments raised to current rates is gaining support.

The Parliamentary petition says it is “discriminatory, unfair and immoral” that around 500,000 state pensioners do not receive the annual increase because they live in countries where the upgrade is not implemented.

Analysis by campaigners shows the impact on frozen pensioners. An overseas pensioner who accessed their basic full paid but frozen state pension in the late 1990s would today be around £50,000 worse off than a recipient who remained in the UK and received annual adjusted instalments.

To receive the annual increase in the state pension, a person must live in one of these countries:

  • United Kingdom
  • the European Economic Area
  • Gibraltar
  • Switzerland
  • Countries that have a social security agreement with the UK (not Canada or New Zealand).

A Government spokesman said: “Our priority is to ensure that all pensioners receive the financial support they are entitled to. We understand that people move abroad for many reasons and we provide clear information on how this can affect their finances.

“The Government’s policy of upgrading the UK State Pension for long-term overseas recipients has been in place for over 70 years and we continue to upgrade overseas state pensions where there is a legal requirement to do so do.”

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