UK urged to rectify ‘injustice’ faced by British retirees who live abroad

Peter Sanguinetti hadn’t planned to move to Canada – but a 1984 work trip to Vancouver led to a job offer and shortly after, a new life in North America.

But it would have grave implications for his retirement many years later.

He is one of hundreds of thousands of British expats receiving a “frozen pension”. Recipients’ state pension payments remain fixed, gradually becoming less and less valuable. Ruinously high inflation over the past two years has made the problem more acute, and led to renewed calls for the Government to help.

Before he left Britain, Mr Sanguinetti – who estimates he has lost £23,000 – had built up a state pension through his work in the rope-making industry and the armed services. He ended up having to drive school buses in his 80s, before Covid meant he could not carry on.

He said: “As to the implications the move would have on my pension, I had no idea what was in store.”

Latest figures show there are around 480,000 state pension recipients living in countries where payments do not grow in line with rising costs and wages. Those relying on these frozen pensions are not covered by the “triple lock”, that ensures retirees in the UK are shielded from inflationary pressures.

Sheila Telford, chairman of the Canadian Alliance of British Pensioners, said: “This is having a real impact on the standard of living for overseas British pensioners and it urgently needs to be addressed.”

Under the terms of Britain’s departure from the EU, arrangements to adjust pension payments were extended to Britons living on the Continent and additional agreements have since been signed with non-EU member states, such as Iceland, to index state pension payments to retirees living there. However, despite a long campaign from British expats in a number of Commonwealth countries no such agreement has been made to increase their payments.

When Ottawa has on several occasions floated the possibility of putting an agreement in place to cover British pensioners in Canada, Whitehall has rejected such approaches.

Lord Davies of Brixton, a member of an all-party parliamentary group lobbying for change, said: “It’s clearly an injustice. You can’t say the only reason we don’t do it is because we don’t have a reciprocal agreement if you’re not prepared to even enter into discussions, it’s clearly a blanket ban.”

Nigel Nelson, a campaigner with the International Consortium of British Pensioners, said: “Right now there’s roughly £ 81bn in reserves in the National Insurance Fund, each year those reserves are growing. Clearly, the UK can afford to uprate frozen state pensions – so, why won’t it?”

A government spokesman said: “We continue to uprate state pensions overseas where there is a legal requirement to do so.”

Marcus Connolly