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UK pensioners in Europe at risk of post Brexit frozen pensions
| Published: | 2 Jun at 6 PM |
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Should Brexit succeed, UK retirees living in EU member states are at risk of losing their annual pension increases.
A major reason why the majority of UK retirees choose residence in EU countries rather than venturing further afield is the ‘triple locked’ annual increase in the UK state pension. The small but guaranteed increase matches either the cost of living inflation, wage inflation or an amount of 2.5 percent, whichever is the greater.With the exception of a few nations, including the USA, with reciprocal agreements with the UK, all other British expat retirees have their pensions frozen from their date of departure from the UK.
Should Brexit succeed, almost half a million British state pensioners living in EU member states are likely to see their pensions frozen, at least for several years whilst agreements are renegotiated. Renegotiations of such agreements are a costly exercise, with none such taking place since 1981 for that reason. Recent decisions by the British government such as the withdrawing of the ‘cold weather’ payment from pensioners living abroad and the even more recent exclusion of tax-paying British citizens living overseas from the free NHS service would indicate the welfare of UK expats isn’t likely to be a government priority post Brexit.
For UK expats in EU countries, the post-Brexit financial climate may well worsen as regards banking and investment, with the only certainty being that IFAs and bank officials have no real idea of the full effects of Britain's leaving the EU. Head of the Federation of European International Financial Advisors Paul Stanfield believes that until the result of the referendum is published, there’s no point in speculation, adding that the offering of financial services between specific countries is an important imponderable.
Expats with investments from providers operating in the Isle of Man, Luxembourg and Dublin are unlikely to see much change, as a 'Leave' referendum result isn’t expected to affect these offshore jurisdictions. Double tax treaties between the UK and several European countries should not be affected if a ‘Leave’ vote results in the UK’s exit.
A major reason why the majority of UK retirees choose residence in EU countries rather than venturing further afield is the ‘triple locked’ annual increase in the UK state pension. The small but guaranteed increase matches either the cost of living inflation, wage inflation or an amount of 2.5 percent, whichever is the greater.With the exception of a few nations, including the USA, with reciprocal agreements with the UK, all other British expat retirees have their pensions frozen from their date of departure from the UK.
Should Brexit succeed, almost half a million British state pensioners living in EU member states are likely to see their pensions frozen, at least for several years whilst agreements are renegotiated. Renegotiations of such agreements are a costly exercise, with none such taking place since 1981 for that reason. Recent decisions by the British government such as the withdrawing of the ‘cold weather’ payment from pensioners living abroad and the even more recent exclusion of tax-paying British citizens living overseas from the free NHS service would indicate the welfare of UK expats isn’t likely to be a government priority post Brexit.
For UK expats in EU countries, the post-Brexit financial climate may well worsen as regards banking and investment, with the only certainty being that IFAs and bank officials have no real idea of the full effects of Britain's leaving the EU. Head of the Federation of European International Financial Advisors Paul Stanfield believes that until the result of the referendum is published, there’s no point in speculation, adding that the offering of financial services between specific countries is an important imponderable.
Expats with investments from providers operating in the Isle of Man, Luxembourg and Dublin are unlikely to see much change, as a 'Leave' referendum result isn’t expected to affect these offshore jurisdictions. Double tax treaties between the UK and several European countries should not be affected if a ‘Leave’ vote results in the UK’s exit.
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