State pensions and upgrades will not change after Brexit for UK and EU nations

by Ray Clancy on September 18, 2017

British expats living in the European Union will continue to receive their state pension after Brexit, which will be uprated in line with those for pensioners living in the UK, it has been confirmed.

The same will apply to EU citizens of pensionable age living in the UK, according to the latest joint technical note announcement from the Brexit talks, after both sides reached an agreement.

(suthisa/Bigstock.com)

It means, for example, that British pensioners living in Spain will continue to get the same annual inflation increases they would have got in the UK. The same will apply to Spanish pensioners resident in Britain.

Expats yet to retire will also benefit from this continuation of the current arrangements. As at present, this arrangement will cover all EU countries plus Norway, Iceland and Lichtenstein who are part of the European Economic Area and Switzerland.

The agreement was reached some weeks ago but has only just been confirmed publicly and there has also been progress on national insurance contributions made while working abroad counting towards state pension entitlement.

The latest update shows that the UK and EU have now agreed to maintain the current arrangement. So a UK citizen who spent some years working in Germany will still have those years count towards their state pension entitlement as the current arrangements for sharing the costs between the various Governments will continue.

Although the whole Brexit deal will have to be approved by the UK Parliament, by EU national Governments and by the European Parliament, it is highly unlikely that these issues will be a sticking point, according to the Pensions and Lifetime Savings Association (PLSA).

It says that the fact they have been agreed so early in the process indicates they are seen as uncontroversial which will come as a relief to pensioners across the EU. ‘Of course, it is possible that the whole Brexit deal might founder because of failure to agree on more difficult issues,’ it warns in a briefing document.

‘However, even if the UK leaves the EU in March 2019 with no deal, the EU regulations in this area would have been copied into UK law under the European Union (Withdrawal) Bill now before Parliament, assuming this passes into law. So the state pension arrangements would continue unless the Government decides otherwise,’ it adds.

It added that there is yet to be confirmation of what will happen with work pensions. ‘Although this part of the Brexit negotiations is about state pensions, the deal must protect workplace pensions as well, as these form a key element of many people’s incomes in retirement,’ the document points out.

‘It is crucial that the final agreement does not leave UK pension schemes exposed to any future EU rules on the valuation and funding of pension schemes, as these would make it far more difficult to run schemes and would probably lead to lower pensions,’ it concludes.

{ 2 comments… read them below or add one }

Jane Davies September 19, 2017 at 2:40 pm

Great for the EU state pensioners but the 4% who have had their pension frozen for decades are very angry that once again they are the forgotten victims of the UK governments deliberate policy of withholding their rightful indexing. Now everyone who believes in fairness and justice must fight for the ending of this outrageous theft from the most vulnerable who are now shouting “why them and not us?”

This forum must now concentrate on this disgraceful policy.

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Andy Robertson-Fox September 20, 2017 at 8:39 am

Totally agree with the comment from Jane Davies about the iniquitous frozen pension policy. These pensioners have made the same contribution to the NI Scheme during their working lives as have the retired UK citizens living in the UK and those EU countries….there should be no “them and us”… there should be parity.

It is to be hoped that those living in the EU and who will benefit from the agreement to continue index linking will appreciate the support their campaigns received not only from ICBP, BPiA and CABP but numerous frozen individuals and duly reciprocate that support .

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