MPs condemn ‘bizarre’ state pension rule as 500,000 get no triple lock increase | Personal Finance | Finance

May 20, 2025 2,065

MPs have blasted a longstanding Government policy that means some 500,000 state pensioners get no yearly increase to their payments.

The frozen state pension policy means if you live in certain countries which don’t have reciprocal social security arrangement with the UK, your state pension entitlement is frozen at the level it was at when you moved there.

This includes countries where Brits have historically often moved to, such as Canada and New Zealand, with people sometimes moving there later in life to join their families.

Conservative MP Gregory Stafford presented a backbench business debate on the matter. He said the policy had been in place for over 70 years, leading to a “severe financial toll on those impacted” but also a “heavy emotional burden”.

Mr Stafford mentioned the curious case of The Falklands Islands, which are a UK territory and yet is affected by the issue.

He said: “The Falkland Islands are a British overseas territory, it’s essentially Britain in all but name. 80 people on the Falklands are in this siutation, many of whom have served in the armed forces. It just seems bizarre to me that even for our overseas territories, we don’t uprate the pension.”

The MP also said: “These are individuals who built their lives and careers in the United Kingdom, contributed their share through National Insurance, and then often later in life moved abroad, in many cases to join family members.

“In doing so, they have found themselves victims of an outdated policy, most of whom only became aware of the policy after noticing that their state pension was not increasing in line with policies such as the triple lock.”

He explained how some elderly pensioners affected by the policy get just £60 a week, while the full basic state pension now pays almost double this, at £176.45 a week.

He also said that now Deputy Prime Minister, Angela Rayner, previously said there should be a change on the frozen pensions policy to find a solution to the issue.

Labour MP Neil Duncan Jordan said that successive Governments had ignored the issue for decades, condemning the policy as a “regressive arrangement”.

He said: “In my view, our state pension system is already insufficient for millions of existing and future pensioners, but imagine how inadequate that would be if the pension had failed to rise at least in line with inflation or earnings for over 20 years of your retirement. Most pensioners in this position were never informed that their state pension would be frozen in this way.”

Adding to the voices calling for change on the policy, Lib Dem MP Sarah Olney said that the UK had not signed any new social security agreements with other countries to ensure state pensioners get the increase since 1981.

She said: “It is critical that the Government take steps to tackle this injustice, and take steps to ensure that all pensioners receive the support that they should be entitled to.”

She called on the Government to negotiate with countries so they could find a way to increase the payments in a way that “manages costs” for the Treasury.

Pensions minister Torsten Bell attended to provide a response from the Government. He said: “There are significant costs to be borne by current taxpayers if uprating was extended to everybody living overseas.”

He said there would have to be tax rises to afford the increase in payments for those living abroad. Mr Bell also said: “The UK Government’s position under all parties is that we are not in the business of new reciprocal arrangements, with any countries.

“The only recent agreements have been the rolled-over agreements with the EU and the EEA, agreed by the previous Conservative Government, but that was to maintain the existing social security arrangements.”