Expats win £ 140k pension promise

BRITISH OAPs living abroad have been guaranteed state pension rises – likely to be worth about £ 140,000 over a 20- year retirement.

The move, confirmed on New Year’s Eve, removes the threat of “frozen” pensions for older people wishing to retire in the sunshine.

Those already living in the EU before December 31 had been reassured they would receive the same uprating to UK state pensions as those living in Britain.

This is currently based on the generous “triple lock” – whichever is the highest of earnings growth, price inflation or 2.5 per cent each year.

Had no deal been struck, those wanting to retire and move abroad may not have benefited. And losing inflation protection on a full state pension could have cost overseas OAPs about £ 138,700, experts Aegon said.

On New Year’s Eve the UK Government updated its guidance to confirm the same increases would apply to those moving to the EU or Switzerland in future.

Aegon pensions director Steven Cameron said: “Few people might have appreciated just how much was at stake here. This April, the state pension will increase by 2.5 per cent from £ 175.20 to £ 179.60 a week.

“While £ 4.40 extra a week may not look huge, losing all future increases really adds up. With many people living 20 or more years after state pension age, any form of inflation proofing is highly valuable, with the triple lock particularly so.

“An inflation- linked state pension of £ 175.20 a week is worth around £ 327,000, whereas one that doesn’t increase is worth around £ 188,300 – £ 138,700 less.”

There was also good news for younger people working in the EU or Switzerland.

They can continue to count future social security contributions paid overseas towards meeting “qualifying conditions” for the UK state pension. Those with fewer than 10 years of “credits” get no UK state pension.

To receive the full UK pension, 35 years of credits will be needed.