Johncar54
The question you have asked may seem quite simple but in fact is extremly complicated.
Historically it goes back to the 1950's when the UK entered into reciprocal social security agreements with other countries.
Depending upon the agreements signed this allowed Social Security Benefits and Uprating Regulations to be applied to pensions both ways. Means that the UK government would agree to uplift pensions of UK citizens abroad if other countries also agreed to boost the pensions of their citizens living in the UK.
However since that time although the UK state pension is payable world-wide it is only uprated abroad where there is a legal requirement to do so.(ie signed and appropriate reciprocal social security agreement)
The issue is seen as a legal and financial one rather tham a moral one.
Current estimates are that it would cost approximately £4 billion to bring frozen rate pensions up to current levels and to pay all the arrears.
It would cost around £550 million if arrears were not paid and this would be an ongoing cost which would rise year on year.
Interestingly, reciprical agreements with the Philippines (as with many other countries)also include 'Double Taxation' agreements. This means that the pensioner can choose
which country to have pension payments taxed. The Philippines have a tax rate
of 0% on pensions. So any pensions paid to you in the Philippines would be tax free provided you have made the appropriate legal declarations to HMRC.
This does not apply to Govt state pension, however, since the level of state pension is below the personal allowance level, this also effectively becomes tax free.
All reciprical agreements are highly complex, and sadly to an extent rather political depending upon national relationships at the time they were introduced and signed.
