On the eve of the Pensions Bill report stage and third reading, MGM Advantage has called on the Government to review the policy denying thousands of people inflation-linked rises in their state pension when they choose to retire abroad.
Where a country does not have a reciprocal agreement with the UK, including some of the most popular retirement hotspots, UK pensions are frozen at the point of retirement.
Andrew Tully, pensions technical director, MGM Advantage commented: “Retiring abroad is an aspiration for many people, with our research showing three of the most popular foreign retirement destinations do not currently have reciprocal agreements in place.
“We need to ensure a level playing field for anyone retiring abroad, irrespective of their chosen destination. People who have been caught out by finding their UK state pension frozen at the point of retirement understandably feel hard done by. For example, if you retired to Canada ten years ago, your UK state pension would now be worth 42%1 less than if you had retired across the border in the US. Many retirees have found this has hit them hard.”
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