In April 2025, State Pension payments are set to rise by up to £470, following the UK government’s decision to uphold the triple lock. However, nearly 500,000 pensioners living abroad will not receive this increase, due to a long-standing policy that freezes State Pension payments in certain countries.
Triple Lock Brings 4.1% Increase for UK Pensioners
Chancellor Rachel Reeves confirmed in October that the government will honour the triple lock — a policy that ensures the State Pension rises each year in line with the highest of average earnings, inflation, or 2.5%. This year, pensions will increase by 4.1%.
As a result:
- The Full Basic State Pension will go up from £169.50 to £176.45 per week — a rise of £6.95.
- The Full New State Pension will increase from £221.20 to £230.25 — a rise of £9.05 per week.
- Over the course of a year, this will amount to approximately £470 more in annual payments for many pensioners.
Expat Pensioners Face Frozen Payments
Despite the increase, thousands of British pensioners living abroad will not benefit, due to the UK’s ‘frozen pensions policy’. This policy applies to retirees who live in countries that do not have a reciprocal social security agreement with the UK. In these places, pensions remain at the rate they were first paid and do not increase with inflation or earnings.
William Cooper, Marketing Director at international insurance provider William Russell, explained:
“Expats can claim a UK State Pension if they have enough qualifying National Insurance contributions — usually 35 years for a full pension. While the pension can be paid overseas, the annual increases depend on where you live.”
Countries like Canada, Australia, New Zealand, and many parts of the Caribbean and Africa fall under the frozen policy. In contrast, UK pensioners in the EU, USA, and a few other countries still receive yearly pension increases.
Cooper advised those considering retiring abroad to explore Qualifying Recognised Overseas Pension Schemes (QROPS), which may offer tax benefits and flexibility. He also encouraged pensioners to consult with international financial advisors to understand the impact of currency changes, taxation, and local laws.
Pension Credit Also Set for a Rise
In addition to the State Pension increase, Pension Credit — a benefit for low-income pensioners — will rise in April, helping around 1.4 million of the poorest retirees.
The Standard Minimum Guarantee will increase:
- For single pensioners: from £218.15 to £227.10 per week (£8.95 rise)
- For couples: from £332.95 to £346.60 per week (£13.65 rise)
However, Pension Credit remains one of the most underclaimed benefits in the UK. Between April 2022 and March 2023, an estimated 760,000 pensioner households missed out on this support, despite being eligible.
Pension Credit also offers help with housing costs, such as ground rent or service charges, making it a vital lifeline for many elderly citizens.
What This Means
While the April increases aim to support retirees amid rising living costs, many pensioners abroad will continue to face financial strain due to frozen payments. Campaigners have long called for reform, arguing that all pensioners who paid into the system should receive equal treatment — regardless of where they choose to live in retirement.
As the new financial year approaches, both UK-based and overseas pensioners are urged to review their entitlements and seek expert advice if unsure about their rights or benefits.
FAQs
1. Who will receive the £470 State Pension increase in April 2025?
UK residents who receive the Full New or Full Basic State Pension will get a 4.1% increase in their payments. This adds up to around £470 annually for those receiving the full amount.
2. Why are some pensioners not getting the increase?
Pensioners living in certain countries with no reciprocal agreement with the UK will not receive the annual increase due to the government’s ‘frozen pensions policy’. Their pensions stay fixed at the rate when they first claimed them abroad.
3. Which countries are affected by the ‘frozen pensions’ policy?
Countries like Canada, Australia, New Zealand, South Africa, and many parts of the Caribbean and Asia are affected. Pensioners in these countries will not receive yearly pension increases unless the UK changes the current policy.
4. Can I still claim my UK State Pension if I live abroad?
Yes. You can still claim your UK State Pension abroad if you’ve made enough National Insurance contributions (usually 35 years for a full pension). However, whether your pension increases depends on where you live.
5. What is Pension Credit and who qualifies for it?
Pension Credit is a benefit for people over State Pension age with a low income. It tops up your weekly income and can also help with housing costs. Single pensioners earning under £227.10 and couples under £346.60 (from April 2025) may be eligible.
6. How much is the State Pension increasing by in April 2025?
- Full Basic State Pension: From £169.50 to £176.45
- Full New State Pension: From £221.20 to £230.25
- Pension Credit (single): From £218.15 to £227.10
- Pension Credit (couple): From £332.95 to £346.60
7. How do I find out if I’m eligible for Pension Credit or other DWP benefits?
You can use the official Pension Credit calculator on the UK government website or speak to a financial advisor or local Citizens Advice Bureau for help with eligibility and applications.
8. What can I do if my pension is frozen abroad?
You can explore transferring your pension into a QROPS (Qualifying Recognised Overseas Pension Scheme), which may offer tax advantages. Always consult a financial advisor with experience in international pensions.
