Half a million expats living with frozen state pension could be liable for a 2.5 per cent increase in payments like other retirees soon, if a labour-backed attempt to lift the block succeeds in parliament this week.
State pensions become fixed when you first retire or move abroad if you decide to live in certain countries, including Canada, India and Australia, but not in others – forcing many to struggle with the cost of living or give up and return home.
Labour leader Jeremy Corbyn has now thrown his weight behind moves to overturn longstanding regulations preserving the status quo, which are effectively rubberstamped each year without formal debate by MPs.
The news has delighted pensioner campaigners, who welcomed Corbyn.
The current policy means some expats who retired when the basic rate was £67.50 a week in 2000 still get that, rather than the £122.30 which will be received by others who retired that year from April 6.
Corbyn said: ‘This is a chance to make a historic change to our pension system and end the arbitrary discrimination against some British pensioners living overseas.
Brexit has heightened political interest in frozen state pensions, because the 472,000 people who have retired to other EU countries currently get automatic annual increases, but it is unclear whether the UK will strike a deal for this to continue after its departure.
That means elderly EU expats would join the other 550,000 retirees whose payments no longer increase in line with the state pension triple lock – whichever is the highest of inflation, average earnings or 2.5 per cent – as they do if you stay in or return to the UK.