Australia most popular with UK retirees in spite of frozen pensions

Australia is still the most popular destination for British pensioners.

Although Spain is regularly mooted as British pensioners’ dream destination, the highest numbers of UK state pensions are paid to former UK-resident citizens living in Australia. The figures state 20 per cent of retired Brits living overseas are domiciled in Oz, a percentage which converts to exactly 234,880 pensioners, the equivalent of the entire population of Swansea. For those who aren’t keen on Australia, the runners up were the USA and Canada, but the USA has one advantage in that, for some strange reason, British state pensioners get the annual state pension uprate whilst those in Australia and Canada do not!

As a result, out of 1.2 million Brit expat pensioners who claimed in 2018, the unlucky ones who’d not taken into account this inequality are losing out by as much as £4,000 a year! Some 550,000 UK retirees are missing out on their pension uprate due to either not being aware of the seemingly illogical differentials between countries where it’s paid and those where it’s not. Unfortunately, retiring to Australia requires a substantial pension pot on top of the British state pension, as the country isn’t by any means a cheap retirement destination.

Those looking to retire overseas with less than a small fortune backing them up should choose between countries where the UK uprate is paid on an annual basis. It may sound like a small amount hardly worth bothering with, but adds up over the years. All the countries in the European Economic Area have the reciprocal agreement allowing the payment, as do those in the EU – at least for now.

It’s possible expats in some European countries will still be eligible for the uprate after Brexit is finalised, but few details are as yet available and there’s a push to overhaul the British restriction and make the uprate available for all British pensioners, no matter where they’re living. Campaigners are working with lawmakers to form a parliamentary alliance to break the deadlock, at least for future payments.