UK state pensions are frozen (not increased annually with inflation) for expats living in many countries, most notably Commonwealth nations like Australia, Canada, New Zealand, South Africa, and India, as well as other locations including Thailand, Pakistan, and many Caribbean nations. Pensions only rise if the recipient lives in the UK, EEA, Switzerland, or countries with a specific, active social security agreement.
Most British Commonwealth countries are in the frozen list; including Australia, Canada, South Africa, New Zealand, and India, as well as British overseas territories such as the Falkland Islands. Thailand is also on the list.
The policy of not awarding increases in some countries overseas has been followed by successive governments and continued with the introduction of the new State Pension on 6 April 2016. Essentially, the reason is cost and the desire to focus constrained resources on pensioners living in the UK.
Claiming a UK State Pension in Canada
Provided you have made sufficient National Insurance payments, you can claim the State Pension when you are within four months of the UK retirement age and can do so by either: Getting in touch with the International Pension Centre (IPC). Submitting an International Claim Form.
the "freezing" policy was introduced in 1946 when a new UK insurance scheme was being set up together with much increased benefits. Pensioners who had already moved overseas to the dominions, as we were known then, would not contribute to the new scheme so their pensions were frozen.
You can keep claiming your UK State Pension overseas. But it might not increase every year as it would in the UK. You'll only get any annual increases if you live in either: any European Economic Area country, Gibraltar or Switzerland.
A frozen defined contribution pension can still grow even if it's not receiving regular contributions. As it's still invested, its value will move depending on the performance of your funds. In a personal pension, fees and market volatility can reduce your pension's value, meaning it could decrease even while frozen.
Tax treatment in Canada
The double taxation agreement between the UK and Canada states that: “Periodic pension payments arising in a Contracting State and paid to a resident of the other Contracting State who is the beneficial owner thereof shall be taxable only in that other State.
Going abroad temporarily
Tell the office that pays your benefit if you plan to go abroad for more than 4 weeks. You can claim the following benefits if you're going abroad for up to 13 weeks (or 26 weeks if it's for medical treatment): Attendance Allowance. Disability Living Allowance ( DLA ) for adults.
What are the best countries for UK retirees?
Retiring Abroad Beyond Europe
While many UK retirees initially focus on European destinations, some look further afield for lifestyle, family, or residency reasons. Canada is a popular option for those seeking a stable healthcare system, strong infrastructure, and long-term residency options outside the EU.
Yes, you can still retire in Spain after Brexit, but you'll need to apply for a visa and meet financial requirements. As a British retiree, you're now considered a non-EU national, meaning you must secure a residency permit and follow specific legal obligations for long-term stays in Spain.
Which Countries Have the Most Sustainable Pension Systems? Iceland, Denmark, and the Netherlands have the most financially sustainable pension systems due to well-balanced contribution rates and participation.
Services Australia outlines the following: If you're overseas for up to 6 weeks — Generally, your pension payments will continue as normal if you're travelling for less than 6 weeks. If you're overseas for more than 6 weeks — Once you reach 6 weeks, your pension supplement will drop to the basic rate.
Thousands of British retirees living in Europe are claiming state pensions of up to £35,000 a year without paying UK tax, analysis shows.
If you are retiring abroad, you can continue to receive your UK State Pension. You can get pension increases yearly if you live in a European Economic Area (EEA) country or a country which has a social security agreement with the UK. For further information go to: Living or working overseas and the State Pension.
If you've been out of the UK for more than 6 months. You might not be able to get settled status if you spent more than 6 months outside the UK within any 12-month period. There are some exceptions to this.
Family visas
If you're in the UK on a family visa, you need to live in the UK for 5 years to apply for indefinite leave to remain. We don't expect this to change to 10 years after the rules change. You can check the rules for applying for indefinite leave to remain.
Can you retire on $500,000 in Canada? Based on some of these rules, let's calculate what the retirement income would be. The average retirement age in Canada is 65. Estimating that the $500,000 is to last you 25 years, your yearly retirement income would be $20,000.
To avoid the UK's 60% tax trap (an effective 60% rate on income between £100k-£125k), the key is to reduce your adjusted net income back below £100,000 by making tax-efficient contributions, primarily via pension contributions, which reclaim your full £12,570 Personal Allowance, and also through salary sacrifice for benefits like childcare or cycle-to-work, and Gift Aid donations to charity.
From 20 September 2025, the full pension is available, under the assets test, for homeowner singles whose assessable assets are under $321,500 – for homeowner couples the number is $481,500. The numbers for non-homeowners are $579,500 and $739,500 respectively.
The 50 – 70 rule is a quick estimate of how much you could spend during your retirement. It suggests that you should aim for an annual income that is between 50% and 70% of your working income. In other words, if you are earning £100,000 then in retirement you will want to achieve somewhere between £50,000 and £70,000.
According to the Department for Work and Pensions (DWP), over 40% of the 1.12 million pensioners living overseas are affected by the frozen state pension. While it may not seem to have a huge impact initially, over 15 years, expats miss out on £26,000 in higher state pension payments, according to interactive investor.