Campaigners are urging the Department for Work and Pensions (DWP) to review its policy on frozen state pensions which reportedly impacts more than 400,000 British expats living abroad.
The International Consortium of British Pensioners (ICBP) has published a new report which slams the Government’s defence of the “immoral” policy which “pushes” Britons into poverty.
Older people who retire overseas in certain countries, including Canada and New Zealand, have their state pension payments “frozen” at the rate they were paid upon leaving the UK.
Some British pensioners living abroad have claimed to have lost around £46,000 due to the DWP’s policy.
According to the “Frozen Pensions: A Policy Overdue for Review” report, figures used by the DWP on the cost of unfreezing pensions are based on a “false presumption”.
This so-called presumption is that all pensions would be uprated to the level they should have been had they never been frozen if the policy is changed, the ICBP reports.
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A campaign group is calling on the DWP to review its policy surrounding frozen state pensions
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However, the group is claiming there is “no evidence” to support this assumption surrounding frozen state pensions.
As part of this claim, the ICBP cited a letter from the DWP to the Sheila Telford, the group’s chair, from January 20, 2025.
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”
Based on this statement, the ICBP analysed what the cost of ending frozen state pension payments would be against the DWP’s estimate.
The cost of “unfreezing” state pensions would come to £66million compared to the DWP’s estimate of £930million for the 2025/26 tax year, according to the group.
This figure would be £53million against the Government department’s estimate for the following tax year.
For 2027/28, the ICBP calculates the cost of ending frozen pensions would be £56million instead of the estimated £930million.
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 annually.
This is the equivalent of 0.05 per cent of the total state pension payments in the 2022/23 financial 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.
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He explained: “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 oversea