The practice of maintaining the basic amount of a state pension at the level it was when a pensioner first qualified, irrespective of where they reside after retirement, is the core issue. This approach means that individuals receiving a United Kingdom state pension and living in certain countries, such as Canada and Australia, experience a significantly lower pension income compared to those living within the UK or in countries with reciprocal agreements.
This pension treatment has far-reaching consequences for affected pensioners. The absence of annual increases, linked to inflation or earnings growth, erodes the real value of the pension over time, potentially leading to financial hardship. Examining the historical context reveals long-standing debates regarding fairness, the cost implications of ending the practice, and the moral considerations of providing equitable retirement income regardless of location.
