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Fears grow for expat insurances and pension as passporting rights issue ignored
| Published: | 21 Jun at 6 PM |
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The threat of losing access to pension payments and insurance coverage for UK expats in Europe is creeping ever closer as the crucial issue of ‘passporting rights’ continues to be ignored by the UK negotiating team.
British expats resident in European member state countries have long been aware of the possible personal financial consequences of a hard Brexit, but as March 2019 creeps closer it’s obvious that Brits in the home country may also be affected. A number of insurers have already transferred their operations from the UK to within the European Union, meaning that, post Brexit, they will be unable to service contracts in the UK. In the same way, those still maintaining offices in the UK will be unable to honour their responsibilities to their expat clients in Europe without breaking the law.
The worst scenario for British expats would see all insurance policies including private healthcare cover, life cover and property cover as well as private and occupational pensions inoperable in EU countries. In addition, Britons living in the UK with existing financial contracts taken out with European companies would no longer be covered. In both cases, pension schemes and credit facilities would be hard hit. According to a report from the Bank of England, around six million Britons and some 30 million European Economic Area policyholders could be affected.
Financiers are pushing for all existing contracts to be subject to ‘grandfathering’, a scheme which allows exemptions to the new rules for existing contracts which would then continue to be covered by the pre-Brexit rules. Without such a safety net, millions of Britons both in the UK and in Europe would find themselves uninsured for all practical purposes and unable to receive regular private or workplace pension payments. It’s also possible that mortgages taken out with UK lenders in order to purchase retirement properties in Europe would be affected.
British expats resident in European member state countries have long been aware of the possible personal financial consequences of a hard Brexit, but as March 2019 creeps closer it’s obvious that Brits in the home country may also be affected. A number of insurers have already transferred their operations from the UK to within the European Union, meaning that, post Brexit, they will be unable to service contracts in the UK. In the same way, those still maintaining offices in the UK will be unable to honour their responsibilities to their expat clients in Europe without breaking the law.
The worst scenario for British expats would see all insurance policies including private healthcare cover, life cover and property cover as well as private and occupational pensions inoperable in EU countries. In addition, Britons living in the UK with existing financial contracts taken out with European companies would no longer be covered. In both cases, pension schemes and credit facilities would be hard hit. According to a report from the Bank of England, around six million Britons and some 30 million European Economic Area policyholders could be affected.
Financiers are pushing for all existing contracts to be subject to ‘grandfathering’, a scheme which allows exemptions to the new rules for existing contracts which would then continue to be covered by the pre-Brexit rules. Without such a safety net, millions of Britons both in the UK and in Europe would find themselves uninsured for all practical purposes and unable to receive regular private or workplace pension payments. It’s also possible that mortgages taken out with UK lenders in order to purchase retirement properties in Europe would be affected.
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