Pension Overpayments and Overseas Retirees

The proportion of UK citizens retiring abroad both pre and post state retirement age is increasing annually at a rate of almost 2% per annum, over the last 5 years. This presents a significant data integrity issue: the challenge of accurately tracking the deaths of British retirees living overseas.  

The Overseas Retiree Demographic 

Approximately 1.7 million UK retirees currently live abroad. 1.2 million are receiving state pension and approximately 600,000 have retired early and receiving private or occupational pensions. 

Mortality Reporting Challenges 

In the UK, there are reliable data sources that can ensure timely and accurate recording of deaths. However, for British retirees abroad, there is no such data.  

With a 2% annual mortality rate, approximately 34,000 overseas British retirees are likely to pass away each year. If these deaths go unreported, pension schemes risk continuing payments to deceased individuals. 

Implications 

Assuming an average monthly pension payment of £500, undetected deaths could lead to overpayments totalling over £200 million annually in private and occupational pensions.  

This presents substantial risks in relation to fraud, governance breaches and regulatory failures. 

Addressing the Data Gap 

To mitigate these risks, some pension schemes send letters to their overseas members asking them to complete proof of life certificates that must be officially certified in their country of residence. This is a very slow, time consuming and expensive process that generally has low response rates.  

MM Proof of Life service 

To vastly reduce the risks of overseas members, MM have launched a fully managed overseas proof of life solution. 

Using highly effective digital biometric ID verification combined with innovative communications and engagement tools, this service delivers cost effective and reliable results. 

MM Overseas will onboard scheme data, send digital communication and verification, deal with member queries, follow up with un-responsive members including hard copy communication if required and manage the whole process for schemes end to end. 

Keeping on top of your overseas membership and complying with regulations does not have to be expensive, admin heavy or complicated.