State pension warning as Britons seeking retirement hotspots will see payment FROZEN

State pension ‘not enough’ to retire on says financial advisor

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Many people seek pastures new and decide to move abroad after they have finished working, but some could be in for a nasty shock, as their state pension payments could remain frozen if they move to certain countries. A frozen pension would not benefit from the benefits of yearly increases through the triple lock.

The issue of frozen pensions impacts Britons who have moved abroad to most countries, with only certain nations who have reciprocal agreements with the UK being exempt from this.

For residents of the UK, the value of the state pension rises every year under the triple lock policy, which ensures an increase by the highest of three figures: Average earnings growth, inflation and 2.5 percent.

However, if a pensioner moves abroad, they will likely receive no annual uprating to their state pension, which can have a damaging impact on their spending power, as inflation continues to increase the cost of living.

People who move to countries within the European Union will still be able to receive a yearly increase to their state pension, with some other countries also partaking.

Jamaica; Jersey; Mauritius; Montenegro; North Macedonia; the Philippines; Serbia; Turkey; and the United States of America.

Unfortunately for many people, that means there are many popular retirement destinations where people will not see their state pension increase each year.

For Britons, Thailand, Australia and New Zealand were three of the five most desired countries to retire in, but in all three of these nations, retirees would see their state pension income frozen.

However, Spain and Portugal, the remaining two nations in the top five, are both in the European Union and would therefore allow British pensioners to be part of the annual uprating of the state pension.

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Here is the full list of the UK’s top five most-sought-after retirement destinations, with the countries where the state pension is frozen flagged:

1. Spain

2. Thailand (frozen)

3. Portugal

4. Australia (frozen)

5. New Zealand (frozen)

Some of the most popular retirement destinations for people across the world could also be a less ideal place to settle for Britons, with the state pension being frozen in four more countries among the top 10.

These are Canada, which was the second most searched country, Argentina, which was third, Costa Rica and Malaysia.

According to the campaign group End Frozen Pensions, there are more than 520,000 British pensioners who have seen their state pension payments frozen across the world.

This could potentially cost Britons hundreds, if not thousands of pounds. Since the new state pension was introduced, the value of the full new state pension has increased by £1,251.80 between the 2016/17 and 2021/22 tax years. It will increase once again by £288.60 next year, but those with frozen pensions will miss out.

Here are the top 10 most searched for retirement destinations worldwide, with the nations where the state pension is frozen flagged:

1. France

2. Canada (frozen)

3. Argentina (frozen)

4. Portugal

5. Australia (frozen)

5. Thailand (frozen)

6. Spain

7. Costa Rica (frozen)

7. Germany

8. New Zealand (frozen)

9. Turkey

10. Belgium

10. Malaysia (frozen)

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