British pensioner Annette Carson, living in South Africa has lost her case against the Government regarding increases to her State pension.
Currently, there are almost one million British pensioners that reside in countries outside the UK. Around 400,000 of them live within other EU countries or the USA. These people do receive index linked pensions meaning that their pensions increase with the rate of UK inflation each year.
For the rest that live in countries such as South Africa, New Zealand, Canada and other countries, British State pensions are paid without any inflationary increases.
Ms Carson brought the case against the Government, claiming they were in breach of the Human Rights Act. However, she lost her case and has had to foot the bill. Apparently, she will not be appealing to the House of Lords because the cost is too high.
Our View
Whilst it is personal preference where a person chooses to live in retirement, not having your State pension increased every year can have a serious impact on your income.
If your State pension is going to be a major part of your income abroad we would suggest checking the situation before you go.
Currently, the UK State pension is £75.50 per week if you are entitled to a full one. However, for those pensioners that retired to countries where no increases are awarded, they are only entitled to the same rate that was applicable when their pensions came into payment. As an example, if you retired 20 years ago to say Canada, a full State pension would mean £32.85 per week, fixed for life.
Learn more about State pensions and get a free state pension forecast in the Pensions Adviser.com.