Whether it's a better climate, lower cost of living or slower pace of life, many UK pensioners choose to move to another country. However, for decades they’ve had to deal with a significant problem – the UK’s frozen state pension policy for retirees living abroad.
The policy has been around for 70 years, but new figures have continued to highlight its impact on retirees living abroad. In March 2025, figures shared by End Frozen Pensions revealed that 40% of overseas pensioners do not currently receive annual increases, with 3.4% of the UK’s 12.7 million pensioners affected. What’s more, around 86% of affected pensioners were unaware of the freeze before moving abroad.
Crucially, the policy doesn’t affect pensioners living in every country. Whether you’re already living abroad or thinking of making the move, it’s important you understand the frozen state pension policy and how it can affect you – as well as what you can do to maximise the value of your hard-earned money abroad.
What is the UK’s frozen state pension policy?
The state pension “triple lock", introduced in 2010, increases the amount retirees living in the UK earn every year. It rises based on the highest of three factors: inflation, average earnings growth or 2.5%.
However, the frozen pension policy means that pensioners living in certain other countries don’t get this increase, meaning the value of their payments has decreased by comparison over time.
This June, Interactive Investor reported that British pensioners who moved abroad before the triple lock policy have missed out on nearly £26,000 worth of payments. People moving abroad during the current tax year could miss out on nearly £70,000 over the next 20 years, if their payments are frozen when they move.
This shows the impact that the freeze can have on your finances over time, as you’ll be missing out on significant savings you would have made by continuing to live in the UK.
Note that if you choose to return to the UK and make the country your permanent residence, your pension rate will be increased to the current level, even if your pension had been frozen for many years abroad.
Where are pensions frozen?
Under the UK's state pension policy, your state pension only increases each year if you live in EU countries, Gibraltar, Switzerland or countries that have a social security agreement with the UK.
In these countries, the triple lock uprate applies. The full list of countries where the freeze does not apply is available on the UK Government website.
However some particularly noteworthy countries where pensions are frozen include:
- Australia
- Canada
- New Zealand
- South Africa
- India
- Malaysia
- Thailand
- Trinidad and Tobago
- Dominican Republic
- St Lucia
Why does the pension freeze matter for your finances?
For pensioners living abroad, their pensions remain frozen compared to current rates. Over time, this means the real-time value of their pension payments will go down.
For pensioners living abroad, this may mean that paying for everyday items, utility bills or expenses can be much higher. They may either have to depend more on their savings, or rely more on financial support from family members abroad.
The problem there is that sending money abroad can be really expensive. Currencies can fluctuate in value, meaning the value of the money sent one month may be different the next month.
Not only that, but many banks still charge high fees to send money to other countries, cutting into the value of money you are sending to or from your destination.
What can expats and retirees living abroad do now?
Campaigns such as End Frozen pensions are currently lobbying the government to change the policy. However, these have so far been unsuccessful, and there are currently no plans for the government to unfreeze state pensions for living abroad.
If you’re planning to move, there are some things that you can do to help.
Consider where you are moving
Unless you are financially prepared for a frozen pension, think about moving to a country where the frozen state policy does not apply.
Factor your frozen pensions into your budget
Estimate the value of your pension 20+ years in the future without annual increases. Remember to consider the impact of inflation over time. You can often find pension calculators online to do this.
Increase your savings
Move money into private pension pots, ISAs or other investments. You may also want to look into Qualifying Recognised Overseas Pension Schemes, which are explained in more detail by the UK Government.
Stay flexible on time spent abroad
Rather than move abroad permanently, you may wish to split your time in another country, or plan to come back to the UK in the future to uprate your pension
Speak to a financial adviser
Retiring abroad can be complicated, especially when it comes to tax and pensions. An advisor can help you plan out a budget that helps you make the dream a reality
Compare money transfers to get the best deal
Whether you are sending money to family members or transferring private pensions and savings abroad, sending through specialised money transfer providers can help you save money and take the impact out of currency exchange rates changing over time.
You can compare providers on the cost of sending money abroad in seconds using FXcompared’s money transfer comparison tool. Or take a look at our full international money transfer guide for pensions abroad.
