Much of the pension money paid by UK government to pensioners resident in the UK is recovered through taxes paid by the pensioners in the UK. These taxes are recovered through a variety of means - Council Tax, VAT, fuel taxes, IPT, taxes on the businesses that pensioners buy from (including supermarkets), etc. These taxes cannot be recovered for non-resident pensioners who therefore cost the government more than resident pensioners, so the government "freezes" these pensions in order to compensate.