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How will Brexit affect UK expat state pensioners
| Published: | 9 Aug at 6 PM |
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Tagged: USA, Australia, UK, New Zealand, Canada, Citizenship, Caribbean, Euro, Emigration, Pension Transfer, England
European Union membership has ensured that retired UK citizens living in member states have their pensions annually updated, but Brexit is expected to change the rules.
The situation is now unclear, but one thing is certain in that, when the UK leaves the EU, all rights to updated pensions will be lost unless new agreements take place with each individual country. Over a million Britons who chose to leave the home country are now in limbo as regards their future state pension income.
Emigrating to an EU / EEA member state ensured the triple-lock applied to state pensions through a joint agreement, now about to be non-relevant and leaving those in receipt of the state pension in the same position as expat retirees in, say, Australia, Canada, Asia and New Zealand. Those in Barbados and in the USA will still receive their increases due to a social security agreement between the UK and these countries.
To many British expat retirees, frozen pensions don’t at present seem a big deal, but it should be remembered that one elderly British expat still living in Australia had her pension frozen at just over £6 when she left the UK many decades ago. A lifespan of 85 or 90 years isn’t unusual nowadays, with inflation steadily eroding a static pension payment.
To ensure annual increases are given to expat retirees living in EU countries, a reciprocal agreement would have to be made between the UK government and each country. This isn’t the get-out clause it appears to be at first, as the UK hasn’t made such an agreement with another country since 1981. A reciprocal agreement with the EU is another possibility, but that’s up to the EU.
The British government pockets around half a billion sterling each year simply by freezing pensions, with that amount estimated to double should pensions for retirees in EU countries be frozen post-Brexit. With a recession looming, it’s unlikely that updating overseas-paid state pensions will even be on the agenda.
The situation is now unclear, but one thing is certain in that, when the UK leaves the EU, all rights to updated pensions will be lost unless new agreements take place with each individual country. Over a million Britons who chose to leave the home country are now in limbo as regards their future state pension income.
Emigrating to an EU / EEA member state ensured the triple-lock applied to state pensions through a joint agreement, now about to be non-relevant and leaving those in receipt of the state pension in the same position as expat retirees in, say, Australia, Canada, Asia and New Zealand. Those in Barbados and in the USA will still receive their increases due to a social security agreement between the UK and these countries.
To many British expat retirees, frozen pensions don’t at present seem a big deal, but it should be remembered that one elderly British expat still living in Australia had her pension frozen at just over £6 when she left the UK many decades ago. A lifespan of 85 or 90 years isn’t unusual nowadays, with inflation steadily eroding a static pension payment.
To ensure annual increases are given to expat retirees living in EU countries, a reciprocal agreement would have to be made between the UK government and each country. This isn’t the get-out clause it appears to be at first, as the UK hasn’t made such an agreement with another country since 1981. A reciprocal agreement with the EU is another possibility, but that’s up to the EU.
The British government pockets around half a billion sterling each year simply by freezing pensions, with that amount estimated to double should pensions for retirees in EU countries be frozen post-Brexit. With a recession looming, it’s unlikely that updating overseas-paid state pensions will even be on the agenda.
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