The government has agreed to look at index linking the state pension for expats with frozen payments.
Cabinet Office minister Oliver Letwin has relented after Whitehall has constantly blocked any discussion on changing state pension rules for expats.
The case was considered closed after European courts ruled in favour of the government some years ago, leaving expats with no avenue of protest other than lobbying ministers and MPs.
Now, Letwin has agreed to revisit the long-running campaign by the International Consortium of British Pensioners (ICBP).
His promise follows MPs voting 297-73 against index-linking the new flat rate state pension starting in April 2016.
Another vote is expected in March on legislation that continues the uprating ban on expat state pensions, but the vote is expected to go the same way.
The ICBP says Labour MPs abstained from voting on the last
Although Letwin will look at the figures, the government has made no commitment to change policy.
The view from the Department of Work and Pensions is that the rules have been in force for around 70 years and that paying expats more would cost millions.
” Our view is that this is not a new rule and that expats knew before they left the UK how they would be affected,” said a spokesman for the department.
“The government has no intention of reversing this policy.”
Discrimination against expats
According to the ICBP, around 1.1 million British expat pensioners live overseas.
About half have their pensions index linked, giving them the same payments as state pensioners in the UK under special arrangements with other foreign governments.
The other half receive the state pension at the rate paid on the date they first receive payment and then the amount stays at that level throughout their retirement.
The ICBP complains that the process is unfair because how much is paid depends on where a state pensioner lives, not national insurance contributions they may have made during their working lives.
“Freezing the state pension for hundreds of thousands of British expats is discrimination by a government supposedly prided for promoting good ethics, fairness and behaviour,” said Jim Tilley, an Australian expat lobbying for the ICBP.