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Expat pensioners take UK government to court

The UK government is being taken to court by a group of British pensioners living overseas because of the differing levels of state pension received depending on which country in which you reside. Many people may not be aware that even if you leave the UK after your retirement you are still entitled to receive the state pension in whichever country you move too. However, it appears that the level of income received will depend upon when you left the UK and to which country you moved.

Those who moved to within the European economic area, Switzerland, the US, Jersey and Jamaica will receive an inflation-adjusted pension until they die. However, UK pensioners who moved to countries such as Australia and South Africa, which do not have reciprocal agreements with the UK authorities, will only receive a pension which was fixed at the time they left the UK. So despite the fact they will have paid in the same level of income tax as those who have moved overseas to countries with reciprocal agreements, their income will reduce significantly over time in real terms.

It is estimated that the court case could impact upon the payment of over 500,000 pensions to former UK residents who have now moved overseas. Potentially it could be a very costly exercise for the UK government if the case is proven.

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