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<p>The policy of this Coalition Government on the up-rating of UK state pension paid
to people living overseas is the same as that of successive post-war Governments.
This is to up-rate such pensions where we are legally required to under the terms
of EU law or a bilateral social security agreement. The up-rating policy is determined
by the differing social security arrangements for the countries concerned. Most bilateral
agreements were entered into over 40 years ago and based on the prevailing economic
and social conditions such as labour market migration patterns – in both the UK and
the other countries. The Commonwealth Charter, while it provides a broad statement
of common values, does not overrule national legislation in commonwealth countries.</p><p>
</p><p>Around 13 million UK state pensions are paid to those entitled, of which around
1.2 million are paid to those living outside the UK. Approximately 550,000 pensioners
live in countries in which the UK state pension is not up-rated. The UK state pension
is paid on the basis of National Insurance contributions and not on the basis of nationality
or citizenship. Information on the nationality, citizenship and ethnicity of state
pension recipients is not available. There is no evidence of a proven behavioural
link between up-rating policy and pensioner migration. Many of the pensioners migrated
well before they reached State Pension age. Only a small minority of UK state pension
recipients, less than five per cent, moved overseas at retirement. However it remains
important that those planning to live overseas consider the impact on their state
pension. The decision to move abroad remains a personal choice for individuals.<br>
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