According to Office for National Statistics (ONS) the UK inflation rate for May fell to its lowest point in almost three years.
The Consumer Price Index (CPI) dropped to 2.0% from 2.3% in April, reaching the lowest level since July 2021, as reported by the Daily Record.
This figure has major consequences for millions of pensioners, as the CPI is a part of the Triple Lock, which dictates the yearly rise in the contributory benefit.
State Pension Increases Highlight Inequality for Overseas Pensioners
Under the Triple Lock policy, the New and Basic State Pensions increase each year based on the highest figure between the average annual earnings growth from May to July, the CPI for the year ending in September, or a minimum of 2.5%
Presently, earnings growth for February to April acts as the highest measure at 5.9%, although it's the upcoming announcement due in August that will be used in the Triple Lock. However, regardless of the measure utilized, nearly 450,000 are expected to miss out on benefits starting in April 2025.
Based on the present measure of earnings growth (5.9%), approximately 2.7 million individuals receiving the full New State Pension could notice a rise in their weekly payments from £221.20 per week to £234.45 — equating around £937.80 every four-week pay period.
Similarly, about 9.7 million individuals on the full Basic State Pension could see their weekly payments increase from £169.50 to £179.65 — totalling around £718.60 every four-week pay period.
State Pensioners all over Great Britain will certainly appreciate the benefit, however, around half a million won't be able to enjoy it, despite having met the necessary National Insurance payments before retiring. This is mainly because they live abroad, in countries that do not have an agreement with the UK Government, resulting in their State Pension remaining frozen at the point they moved abroad.
Campaign Group Pushes for Fairer Pensions for Britons Living Abroad
The 'End Frozen Pensions' campaign, administered by the International Consortium of British Pensioners, aims to put an end to this “injustice of pensions for Britons who have moved abroad” and to ensurethey receive the yearly rise that aligns with the Triple Lock policy.
This campaign highlights the challenges faced by numerous state pensioners, who have previously served as nurses, firefighters, police officers, and other public service roles, including military veterans. The campaigners caution that “many are now living in poverty despite paying their National Insurance contributions in full”.
The End Frozen Pensions campaign group stated: “They moved, often to be near family, to live in one of the countries without a reciprocal agreement to inflation link their State Pension, so their pension is 'frozen' at the level it was at when they left the UK.
“Those in countries with reciprocal agreements are unaffected so if you were a pensioner in the USA you would continue to get an uprating, but if you lived just across the border in Canada you would not. We believe this is deeply unfair and arbitrary and penalises hard working Britons.”