Uprating the state pension in countries where it is frozen would cost the government £3.1bn, according to new figures.
The Department for Work and Pensions (DWP) said that this relates to estimates between 2019/20 and 2023/24.
This comes after it revealed about 510,000 recipients of the UK state pension living overseas do not get annual increases.
The DWP outlined the strategy in its document entitled ‘Estimated costs of uprating state pension in frozen rate countries’.
It said: “The policy on uprating UK state pensions for overseas residents is that the annual index-linked increases are paid outside the UK where there is a legal requirement to do so.
Examples of this are where UK state pension recipients are living within the European Economic Area or where there is a reciprocal agreement between the UK and the host country that provides for uprating of the UK State Pension.”
Currently, many pensioners living in the UK have their state pension increased according to the triple-lock principle, by a minimum of 2.5%, the rate of inflation, or average earnings growth, whichever is the highest. The same applies to expat pensioners living in certain countries, such as the US, all European Union countries, Barbados, Bermuda and Israel.
However, pensioners living in countries such as Australia, Canada, New Zealand and South Africa have had their state pension frozen at the value it was at in the year they left the UK.
The government has been urged to correct this policy to allow increases for expats with frozen pensions, with more than 219,000 people signing a petition.