According to the report titled ‘Frozen Pensions: A Policy Overdue for Review’, the figures used by the DWP on the cost of unfreezing pensions are based on the “false presumption” that, at the date of such a policy change, all pensions would be uprated to the level they would have been had they never been frozen.

There are currently more than 450,000 British pensioners living outside of the UK who do not receive annual upratings because of the frozen pensions policy.

The ICBP claimed there was no evidence to support the DWP’s presumption and cites a letter from it to ICBP chair Sheila Telford in January 2015, following a Freedom of Information request.

It said: “Where a bilateral [social security] agreement does include provision for uprating, […] the current level of state pension is uprated by the appropriate uprating mechanism, from the date that the agreement was signed.”

The DWP has estimated the cost of ending the frozen pension policy as £4.59bn over five years if the affected pensions were uprated fully to the amount lost since they were frozen.

As part of a debate in the commons on this topic last month (February 13) pensions minister Paul Maynard said: “According to the latest estimate, based on data from March 2022, uprating the state pension where we do not currently do so would cost about £0.9bn a year if all UK state pensions in payment were increased to current UK levels.”

However, the ICBP estimates the cost of the policy change as £307mn over five years, amounting to approximately £60mn per year.

The ICBP are asking the government to unfreeze state pensions in the countries they still remain frozen in the same way pensions have been unfrozen in other countries.

It is also calling for the government to commit to a full review of the policy, including providing costs that take into account the DWP’s statement made to Telford.

Patrick Edwards, board member of the ICBP said: “The figures that are used by the DWP to defend this indefensible policy are a complete fantasy that stretch credulity to breaking point.

“The fact these fantasy projections can be used to prevent an end to this injustice is immoral, frozen pensions are not a parlour game for Whitehall but an everyday reality that pushes many frozen pensioners into poverty, denied the retirement they deserve and feeling abandoned by their own country.

“As history and the DWP’s own words make clear there is no question or chance of pensions being fully uprated, so it is high time that they stopped hiding behind flawed arguments and false figures and brought this shameful, indefensible and immoral policy to end once and for all.”

As part of the debate in parliament last month, Maynard said the DWP had “no plans” to uprate frozen state pension payments for more than half a million UK expats.

He said: ““The UK government continues to uprate state pensions where there is a legal requirement to do so and has no plans to change its longstanding policy or enter into any new reciprocal social security agreements.”

A spokesperson for the government told FTAdviser: “Our priority is ensuring every pensioner receives the financial support to which they are entitled.

“We understand that people move abroad for many reasons and we provide clear information on gov.u about how this can impact their finances.

“The government’s policy on the uprating of the UK state pension for recipients living overseas is a longstanding one of more than 70 years and we continue to uprate state pensions overseas where there is a legal requirement to do so.”

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