453,000 state pensioners could miss out on £470 April increase

The state pension is set to rise by 4.1% next month, but nearly half a million pensioners will not benefit from the increase as their payments are frozen

Bookmark
Share
Comments

News

Levi WinchesterMoney Editor

Kieran IsginMoney & Lifestyle writer

12:33, 25 MAR 2025
Updated12:34, 25 MAR 2025

Older man using laptop — Some people will miss out on the April state pension payment increase (Image: Getty Images)

Nearly half a million ex-pat state pensioners are set to miss out on an annual increase worth up to £470 when the state pension rises next month. The state pension is due to rise by 4.1% from April 2025, thanks to the triple lock promise.

The triple lock ensures that the state pension increases each year by the highest of either inflation (using the previous September's inflation figure), wage growth (average growth between May and July), or 2.5%. This year, state pension payments are increasing due to wage growth, which was 4.1%.

However, not all will see their state pension increase next month. Some 453,000 state pensioners residing in some of the most favoured overseas retirement destinations won't experience the increase, as there is no reciprocal agreement in place to annually boost state pensions in certain countries, including Australia, New Zealand, and Canada.

If your state pension is frozen, it remains at the rate from when you first emigrated. Your pension will rise to the current rate if you return to live in the UK, reports the Mirror. You will only witness your state pension increase every year while abroad if you reside in the European Economic Area (EEA) or Switzerland, or in a country that has a social security agreement with the UK, excluding Canada and New Zealand.

William Cooper, Marketing Director at international health insurance firm William Russell, explained: "Expats are eligible to claim a UK State Pension, provided they have accumulated sufficient qualifying years of National Insurance contributions. This varies depending on when you first started working, but a good rule of thumb for a full state pension means at least 35 years of paying National Insurance in the UK."

He continued: "The pension can be paid to you regardless of where you live, but it's crucial to understand how living abroad may affect the amount and any potential increases. If you reside in certain countries, typically those with a reciprocal social security agreement with the UK, your State Pension may still increase each year as it would if you were in the UK. However, in other countries, the pension may be 'frozen' at the rate it was first paid."

Cooper also advised: "For those considering transferring their pension abroad, it's essential to explore options like a Qualifying Recognised Overseas Pension Scheme (QROPS), which may offer tax advantages or more flexibility. Always seek guidance from a financial advisor with international expertise to navigate currency fluctuations, tax implications, and local pension regulations."

The current full new state pension stands at £221.20 a week, or £11,502 annually, but this is set to increase to £230.30 weekly, or £11,975 yearly, from April - marking a yearly boost of £473. The full basic state pension is currently valued at £169.50 a week, or £8,814 a year, but will rise to £176.45 a week, or £9,175 a year - an annual increase of £361.

The type of state pension you claim is determined by your birth date. The exact amount of state pension you receive also varies based on your National Insurance record. For the new state pension, most individuals require 35 qualifying years on their National Insurance record to receive the full amount, and typically ten years to receive any sum at all.