UK Pensioners Living Abroad Lose Appeal for Pension Increases

March 16, 2010 ( - More than half a million UK pensioners living in other countries will continue to have their pensions frozen, a European Court has ruled.

The European Court of Human Rights rejected 11 – 6 an appeal from a group of pensioners wanting to receive increases in line with inflation. According to BBC News, if pensioners have moved to countries with a reciprocal arrangement – such as in the European Union or the United States – then they receive pension increases. However, if pensioners have moved to countries without any such agreement – such as Australia, Canada and South Africa – their pensions have been frozen at the level of when they moved overseas.       

The pensioners argue that they paid into the pensions system when they were working and are entitled to the same benefits as those who remained in the UK. However, the court said: “The applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension,” according to the news report.      

There are more than a million UK pensioners living overseas – with about half of them affected by the pensions freeze. For pensioners who retired in the early 1970s, the pension can be as low as £6 a week, while those who retired in the early 1980s receive about £30 a week, and those who retired in the early 1990s get about £50 a week. The current basic state pension is £95.25 a week.       

The news report said the decision has saved at least £500m a year for the government, which said that its first responsibility was with pensioners living in the UK.