“Retiring overseas may seem like a warm and relaxing way to spend your golden years, but if you want to retire to any one of 120 destinations, including Canada, the Caribbean and Australia, you will pay a massive and utterly unfair price – you will have your state pension frozen, and it will gradually become worth less and less as you see inflation destroy it.

So why is this happening, and how can it be fair?

Unfair pensions: The issue depends entirely on where you retire to. Around 5.3% of all pensioners (635,300 of them) have retired to Europe, the US or any one of 40 countries which have an agreement with the UK. It means their pensions increase in exactly the same way as if they lived in the UK.

It’s the 4.4% of pensioners (55,750 of them) who retired to Commonwealth countries and elsewhere who have had their state pensions frozen at the rate it was paid at on the day they left. The five affected countries where British ex-pats are most likely to live are Australia, Canada, New Zealand, South Africa and India.”

Reported on 30 April 2012 by Pension Forecast »