Uprating frozen UK state pensions estimated to cost £4.6bn

Around 480,000 recipients of the state pension living overseas do not get increases

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The cost of uprating the state pension in frozen rate countries could be £860m in 2023/24, Department for Work and Pensions (DWP) statistics have revealed.

UK state pensions for overseas residents are increased in-line with the annual index-linked increases where there is a legal requirement to do so.

As of March 2022, there were approximately 480,000 recipients of the UK state pension living overseas who do not get pension increases with 84% residing in Australia, Canada and New Zealand.

However, figures from the Department for Work and Pensions showed that uprating the state pension in frozen rate countries could cost £4.59bn ($5.89bn, €5.33bn) between 2023/24 and 2027/28.

Estimated cost of uprating state pension

YearEstimate cost
2023/24£860m
2024/25£940m
2025/26£930m
2026/27£930m
2027/28£930m
Total (2023/24- 2027/28)£4.59bn
Source: DWP




The estimates are based on the latest available data from the 5% extract of DQP’s State Pension administrative data, the Quarterly Statistical Enquiry (QSE).

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