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Post Brexit chaos threatens UK expats with private pensions
| Published: | 18 Sep at 6 PM |
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British expat retirees with private UK pensions are being warned their regular payments may be at risk post-Brexit.
Chairperson of the parliamentary Treasury Committee Nicky Morgan is calling for immediate action over the risk to UK expat private pension holders that their regular payments may be blocked after Brexit takes effect. Morgan is attempting to draw attention to the possible problem by writing to the UK chancellor to ask whether the issue will be discussed during the next round of UK/EU negotiations.
The problem is rooted in the thorny issue of so-called passporting rights, the mechanism by which EU and UK insurance companies sell insurance products, savings and pension plans across all the EU’s borders. Since the referendum, much been written about the threat of losing passporting rights and its effect on the UK’s financial industry and its customers. If a deal on passporting rights can’t be struck, providers will no longer be able to legally pay pensions due to their expat clients.
MP Morgan, a Remain voter during the referendum, stated that whilst papers have already been published regarding marketable goods, nothing so far has seen the light of day regarding services on hundreds of thousands of insurance contracts sold under existing ‘passporting’ rules and with a duration beyond 29 March 2019. According to the Association of British Insurers, if a solution isn’t found by the time Britain leaves the EU, insurers will be in an impossible position as regards a choice between risking breaking the law and leaving their clients high and dry by breaking their promises to pay.
According to the Office for National Statistics, almost a million Britons were living in EU member states by 2011, with possibly tens of thousands more emigrating to member states since that date. One in every three lives in Spain, and private pensions tend to run for 30 years or even longer.
Chairperson of the parliamentary Treasury Committee Nicky Morgan is calling for immediate action over the risk to UK expat private pension holders that their regular payments may be blocked after Brexit takes effect. Morgan is attempting to draw attention to the possible problem by writing to the UK chancellor to ask whether the issue will be discussed during the next round of UK/EU negotiations.
The problem is rooted in the thorny issue of so-called passporting rights, the mechanism by which EU and UK insurance companies sell insurance products, savings and pension plans across all the EU’s borders. Since the referendum, much been written about the threat of losing passporting rights and its effect on the UK’s financial industry and its customers. If a deal on passporting rights can’t be struck, providers will no longer be able to legally pay pensions due to their expat clients.
MP Morgan, a Remain voter during the referendum, stated that whilst papers have already been published regarding marketable goods, nothing so far has seen the light of day regarding services on hundreds of thousands of insurance contracts sold under existing ‘passporting’ rules and with a duration beyond 29 March 2019. According to the Association of British Insurers, if a solution isn’t found by the time Britain leaves the EU, insurers will be in an impossible position as regards a choice between risking breaking the law and leaving their clients high and dry by breaking their promises to pay.
According to the Office for National Statistics, almost a million Britons were living in EU member states by 2011, with possibly tens of thousands more emigrating to member states since that date. One in every three lives in Spain, and private pensions tend to run for 30 years or even longer.
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