DWP rejects call to up-rate State Pension for half a million older people living abroad

A new petition calling on the UK Government to give people over State Pension age living abroad the same annual payment uprating as those permanently resident in Britain, has been rejected by the Department for Work and Pensions (DWP).

Created by Kevin Maguire and posted on the official petitions-parliament website, it has received more than 11,230 signatures of support and asks for the DWP to give “all the UK citizens living abroad, who have paid the necessary National Insurance Contributions, the same State Pension payments as those residing in the UK.

“UK citizens living abroad do not receive the annual increase in pension payments.”

The petition continues: “This is entirely unjust! Why should we not get equal rights? Pensioners living abroad are less of a strain on the National Health (not using the services of GPs, emergency services etc.), in the vast majority of cases having to fund health care including care homes privately.

“Not receiving Winter Fuel Payment, not receiving discounted travel on public transport. Yet we are still penalized! It is only fair that the [UK] Government treats all its citizens on an equal basis!”

In response, the DWP recently replied: “The UK Government has no plans to change the current arrangements for payment of UK State Pension overseas.”

It went on to explain that the State Pension system is primarily designed for the benefit of those who are resident in the UK, but that it is payable worldwide.

There are now more than 1.1 million UK State Pension recipients who are overseas residents and around 500,000 of them do not receive increases, according to the DWP.

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The Department said it would “cost over £0.6bn extra a year to up-rate these pensions fully, that is to pay the pension at the rate that would be applicable if the pensioner had lived in the UK”.

It explained that paying future increases only would cost tens of millions in the short-term but would lead to the cost of full uprating (£0.6bn) in the longer-term as “older pensioners died and new pensioners became entitled to fully up- rated state pensions”.

The DWP responded: “It is uprated in the UK and also in countries abroad where there is a legal requirement to do so.

“This is a longstanding policy and has been implemented by successive Governments of all political persuasions for over 70 years. The policy has been the subject of Parliamentary debates over time and has been approved by Parliament and the Courts.

“The rate of National Insurance contributions paid has never earned entitlement to the uprating of pensions payable abroad. This reflects the fact that the UK scheme is primarily designed for those living in the UK.

“The National Insurance scheme operates on a ‘pay-as-you-go’ basis. Contributions paid into the National Insurance Fund in any year finance contributory benefit expenditure in the same year. A person’s contributions provide a foundation for calculating their future benefit entitlement but do not actually pay for those benefits.”

UK expenditure on health care costs depends on where the UK pensioner settles.

While the location may be decided by the pensioner, individual countries have their own immigration policies in relation to older economically inactive people.

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The DWP said that paying uprating to UK pension recipients in countries where it is not currently paid would mean an immediate increase in costs.

It said: “Cost has always been a factor in deciding whether pension increases should be paid in overseas countries and successive governments have taken the view that it would be unfair to impose an additional burden on contributors and taxpayers in the UK to fund increased pensions for those who have chosen to live abroad.

“Ultimately, there is a choice for the individual to make where to live, and what the consequences are should that choice be somewhere other than the UK.

“UK State Pensions paid to people living outside the UK also go to people who migrated for economic or other reasons well before they reached pension age.”

You can find out more about claiming State Pension abroad on the GOV.UK website here.

The petition closes on May 29, you can read the full response here.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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