British pensioners living abroad, including in Thailand, will soon see their UK banking privacy compromised if suspected of cheating on their state pension. Under the Data Protection and Digital Information Bill, which is currently at the committee stage in the House of Lords and expected to come into effect in early 2025, British banks and building societies will be required to share account information with the Department for Work and Pensions (DWP) if fraud is suspected. This applies to British citizens living both in the UK and abroad.
One of the key issues targeted by the bill is a practice among a small minority of British expats who hide their residence in countries that are not eligible for annual state pension increases. The rules surrounding these inflation-linked raises are complex—some countries, like those in the EU and the Philippines, qualify, while others, like Thailand and Australia, do not. There are around 500,000 British pensioners living abroad who receive “frozen” state pensions, and the DWP estimates that overpayments in this area total around £100 million.
A common tactic among these pensioners is to keep a UK address for official correspondence with the DWP, even though they spend much of their time abroad. One British expat living in Thailand was caught last year when a DWP letter sent to his London address was returned by a neighbour, who cheekily noted, “Lucky sod lives in Pattaya.” Another was exposed after his wife discovered he was living it up in Bangkok, not working in Baghdad as he had claimed. The new legislation will likely use computerized data to flag state pension claimants who are receiving annual increases but appear to be living overseas based on their bank account activity.
However, critics of the new measure, including a pressure group in Thailand campaigning against frozen pensions, argue that pension fraud is a very minor issue. The group points out that the real problems are mistakes made by the DWP in processing claims and the discriminatory nature of the current pension rules, which treat pensioners differently depending on the country they reside in. Neither the previous Conservative government nor the current Labour government has shown much interest in addressing these issues.
Another concern for many British expats in Thailand is the unreliable international postal system. Every three years, UK authorities require pensioners to submit a “certificate of life” to prove they are still alive in order to continue receiving payments. However, these letters are often sent by regular air mail through an agency in the Netherlands, and many never reach their intended recipients, leading to suspension of payments when no response is received. “The whole system is insane and discriminatory,” said Pattaya-based Frank Weston, 68. He suggested that the outdated paper-based process should be replaced with a more efficient digital system.
credit
