How much the state pension will rise by next year has been a hot topic in recent months, as the Government opted to temporarily suspend the state pension triple lock and therefore limit the amount retirees will receive. However, for around half a million people, it is a moot point, as their state pension will not change regardless.
This is because depending on where people live, they may not receive any uprating to their state pension income at all, with expats who have moved overseas to a number of counties falling victim to this freeze.
Many people will therefore miss out on an increase of more than three percent to their state pension income next year.
The issue of frozen pensions has been present for decades, meaning that only people living in certain countries will see their income rise each year.
British pensioners living in the European Union, the US or a number of other nations are entitled to the yearly boost.
However, people living anywhere else receive no annual uprating to their state pension income, despite having contributed National Insurance while previously living in the UK.
An estimated 500,000 pensioners will therefore miss out on an increase of more than three percent to their state pension income next year.
The full new state pension increased by £228.80 between the 2020/21 and 2021/22 tax years, and it will increase by £288.60 next year.
There have been concerns raised that the state pension increase may not be sufficient in any case, as worryingly high rates of inflation could eat into the extra cash – meaning pensioners lose money in real terms.
The state pension is usually increased using the triple lock policy, which guarantees it is boosted by the highest of three figures: average earnings growth, inflation, and 2.5 percent.
However, in a controversial move, the Government decided to temporarily suspend the triple lock for the 2022/23 tax year, denying pensioners an increase of more than eight percent in the process.
The decision was taken because the average earnings growth figure was unusually high, which was believed to be the result of millions of Britons returning to work following the closure of the furlough scheme.
The Government has stated this change will only be for one year, and the triple lock will be reinstated in the usual way for the 2023/24 tax year.