Analysts are sounding the alarm that around 500,000 pensioners will miss out on a £470 boost to their state pension payments despite the triple lock.
Under the triple lock, the retirement benefit from the Department for Work and Pensions (DWP) sees its payments rate go up by either the rate of inflation, average wages or 2.5 per cent; whichever is highest.
Notably, nearly half a million older British expat will miss out on a payment hike when the state pension increases by 4.1 per cent in April 2025.
This payment rate rise is in line with average wages under the triple lock but many retirees living abroad won’t benefit due to the “frozen pensions” policy.
Half a millions Britons are expected to miss out on the triple lock boost
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Under this regime, there is no annual increases for pensioners in certain countries without reciprocal social security agreements with the UK.
International health insurance experts at William Russell have shared essential information for expats claiming UK pensions abroad.
According to the firm, Britons are advised to understand eligibility requirements and how living overseas affects pension payments and increases.
William Cooper, a marketing director at William Russell, explained: “Expats are eligible to claim a UK state pension, provided they have accumulated sufficient qualifying years of National Insurance contributions.
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“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.”
Experts advise that a minimum of 10 qualifying years is needed for even a basic state pension entitlement.
Those approaching retirement are being urged to check their eligibility status to ensure they receive their full entitlement.
“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,” Cooper added.
For those considering transferring their pension abroad, options like Qualifying Recognised Overseas Pension Scheme (QROPS) may offer tax advantages or greater flexibility.
How to check state pension eligibility
Amid concerns over retirees missing out on the triple lock boost, William Russell is reminding people on how to check their entitlement:
- Start by checking your National Insurance record through the UK Government’s online service to view your qualifying years
- Use the “State Pension Forecast” service to estimate how much you might receive and when you can claim from payments
- If there are gaps in your contributions, see if you can make voluntary National Insurance payments to increase your entitlement
- Verify whether your country of residence has a reciprocal agreement with the UK, as this will likely affect annual increases
Cooper advises: “Always seek guidance from a financial advisor with international expertise to navigate currency fluctuations, tax implications, and local pension regulations.
“Proper planning ensures your pension works for you, wherever you choose to retire. With these steps, you can optimise your pension’s value and ensure a smooth transition to living abroad.”
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How to apply for QROPSs
For those interested in QROPS, William Russell has broke down the application process in several key steps:
- Research reputable QROPS providers recognised by HM Revenue and Customs (HMRC) in your country of residence
- Consulting a financial advisor with expertise in expat pensions is strongly recommended
- Request a transfer value from your existing pension scheme to determine the amount available
- Complete the necessary paperwork for both your current pension provider and the QROPS provider
- Once approved, funds will be transferred, though fees and tax charges may apply
