half of all British pensioners currently living abroad. The financial implications are huge – a pensioner retiring to a frozen country today stands to lose more than half of their rightful pension over 20 years, leaving some virtually destitute in the long term.

Politicians and the media alike are currently fixated on Britain’s ageing population. According to the Government, the UK will have 626,900 people aged 100 or more by 2080, 53 times the current number of centenarians.This type of shock statistic was released with a very concrete objective – to sweeten the pill of controversial public sector pension reforms.
But it seems more time has been spent quantifying the problem rather than coming up with imaginative solutions.
Fighting the unions over cherished public sector pensions is one avenue being proposed. Another is to encourage hard-working young immigrants to settle here, bringing down the average age and boosting our tax intake. But no politician appears to want to champion that route. Therefore it strikes me as quite bizarre that the Government is overlooking a rather simple policy change that could have an enormous impact on both our demography and economy.
Surprising as it may seem, the first group of an estimated 17 million baby boomers have now already entered the pension bracket, swelling the number of recipients of the basic state pension. This is a generation that has travelled the world and inspired their children to do the same.
A recent survey of 45-65 year-olds carried out by Opinium found that almost one in two of this generation would consider retiring abroad – whether that is to join children already there, enjoy more reasonable weather, or because they feel other countries have greater respect for older people.
By moving abroad, these pensioners would save the Exchequer billions of pounds in health and social care costs. They would not be taking up hospital beds and demanding nursing care – which are both reaching crisis point. In addition, emigration frees up precious accommodation at a time when we are 1.5 million housing units short and have limited space or resources to build new homes. Helping a substantial proportion of our elderly retire abroad would go some way to addressing the ageing population problem. But a peculiar government policy forces too many to give up on these dreams.
Many decide against emigrating once they realise that in countries such as Australia, Canada and New Zealand (to name but three of the 156 affected countries) they won’t have access to the basic state pension they have earned. Regardless of how long workers pay into their National Insurance pot, this state pension will be worth next to nothing if a person moves to one of the so-called “frozen” countries.
This is because the Government freezes their pension at the same rate they are first drawn in those countries, with no further increases in line with inflation – despite uprating pensions as normal in other countries, including other EU member states and the US. Just imagine if from tomorrow your income stopped increasing and remained at the same level for the rest of your working life, while the price of everything around you rose.
This is what has happened to more than 500,000 British pensioners – half of all British pensioners currently living abroad. The financial implications are huge – a pensioner retiring to a frozen country today stands to lose more than half of their rightful pension over 20 years, leaving some virtually destitute in the long term.
While curtailing retirement options and refusing us our rightful pensions, the Government has been benefiting to the tune of £2.5bn per year in savings on health and social care costs for these pensioners already living abroad. The savings could be bigger if the Government reversed the freeze on pensions.
The Opinium survey found that up to 40pc more people would consider retiring abroad if their pensions were unfrozen. Nearly two thirds of those who would retire abroad didn’t know that their pension might be frozen.
The International Consortium of British Pensioners is campaigning against this policy on behalf of those who have been denied these increases in their state pension. It is also seeking to help all those who might be thinking of retiring abroad to know what their options are and to lobby Parliament for a fairer deal.
Unfreezing pensions is the right thing to do and makes economic sense. If the Government are really seeking a fair solution to our ageing population crisis, they should begin with this.