Talks on Brexit likely to make sure expat pension rights are protected

by Ray Clancy on August 3, 2017

Despite the lack of information on what financial circumstances British expats living in European Union countries face when Brexit happens in 2019, there are some good signs, according to experts.

Expats are desperate for information so that they can get on with their lives, particularly when it comes to health and finances, with older people most concerned about pension provision. It is estimated around 472,000 pensioners live in EU countries.

(suthisa/Bigstock.com)

Currently retired expats in the EU qualify for any annual increase in the basic pension paid by the British Government whereas those living in countries such as Australia, New Zealand, Canada and South Africa do not.

But the offer that has been out on the table by the British Government does pledge to protect existing pension and healthcare provisions for British people living in Europe, subject to mutual agreements being put in place.

It means that if this is accepted pensioners continuing to live in countries like Spain, France, Portugal, Germany, Cyprus and Italy should not see a change in their state pension income compared with compatriots in the UK.

According to wealth management and tax firm Blevins Frank, this arrangement is set to be locked in until at least 2022 and current healthcare arrangements would be similarly protected, but it points out that this is subject to the other EU countries making similar guarantees for their nationals living in the UK.

‘Of course, this is just the opening gambit of Brexit negotiations and there are no guarantees that what the Prime Minister is proposing will be accepted by the other EU member states. She has made it clear that her offer only stands if she can secure a reciprocal deal with the EU27 that they will provide similar concessions to their citizens living in the UK,’ said a spokesman.

Government officials are convinced that the triple lock on pensions for UK citizens retired in the EU, which ensures UK state pension incomes go up at the rate of inflation, earnings or 2.5%, whichever is higher, will stay. ‘The UK will continue to export and uprate the UK State Pension within the EU,’ said a statement.

However, not everyone is convinced. In a new report sociologist Dr Michaela Benson pf Goldsmiths, University of London, said pensioners should be making plans. ‘While current arrangements allow for Britons living in the EU to receive pension increases in line with inflation, withdrawal from the EU might entail the end of this reciprocal arrangement,’ she writes.

‘This could result in the freezing of pensions and hence a real term reduction in the incomes these pensioners receive,’ she added.

Meanwhile the British ambassador in Spain has sought to reassure expats that the Brexit negotiations are moving in the right direction. ‘The British Government has repeatedly said that, until exit negotiations are concluded, the UK remains a full member of the European Union and all the rights and obligations of EU membership remain in force,’ he said in an open letter.

‘You can continue travelling throughout the EU on your UK passport, without any visa requirements. You can continue to access Spanish healthcare and draw your UK pension. If you have any difficulties accessing those rights, do please let our Consulates know,’ he added.

{ 2 comments… read them below or add one }

Jane Davies August 4, 2017 at 12:27 am

ALL expats are entitled to an indexed pension but 4% are victims of the frozen pension scandal just because of where they live even though ALL have paid into the system on the same terms as everyone else. When demands are made for parity with the 96% they are constantly told NO new reciprocal agreements are going to be entered into by the UK government, ever! So if this blatant discriminatory stance by the government is overturned for EU expats then the frozen 4%, who have been fighting for justice for decades, will want to know why.

Reply

Andy Robertson-Fox August 4, 2017 at 8:46 am

David Cameron, when Prime Minister, made the committment following the referendum that until Brexit was completed the UK would remain part of the EU and Social and Welfare benefits and pensions would continue to be exportable. As regards the more recent government statement, it would appear to have left out the last two words “with reciprocity”, which formed the basis of May’s offer to the EU.
However, either way, the government will be facing a dilemma. If it freezes the EU pensioners it will be facing the wrath and protests of over a 1.2 million pensioners – those in the EU plus those living abroad elsewhere -who have met the same NI contribution conditions as everyone else or if the government concocts reciprocity with the E27 then 550,000 already frozen pensioners in Australia, Canada, New Zealand, South Africa, Thailand, Japan and the other countries around the world will be asking why, having denied for over thirty years any plans to agree more such arrangements, the European based pensioner but not us?

Reply

Leave a Comment

Previous post:

Next post: