- Home » Expat News » Brit expats risk post Brexit block on pension and insurance payments
Brit expats risk post Brexit block on pension and insurance payments
| Published: | 22 Feb at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
British expats are still being kept in the dark over the threat to their pension payments due to Brexit’s terminating of passporting rights.
Five months after the revelation that British expats might lose their pension and insurance payments post-Brexit due to the withdrawal of so-called ‘passporting rights’, no clarification has as yet been given. Passporting rights are in common usage by UK and EU financial advisors to provide products across all EU member states’ borders. Passporting is set to end in March next year unless the issue is dealt with to the satisfaction of both negotiating teams – a possibility which may not become a reality.
Should this happen, insurers and pension product providers will be caught between the rock of breaking their contracts to clients and the hard place of breaking the law. Whatever the hardship caused to product providers, it’ll be nothing compared with that endured by British investors and pensioners overseas. The issue is one of the harshest consequences of a hard Brexit or of the UK crashing out without a deal. It seems neither side has given the situation much thought, with the EU presenting no position papers and the UK not mentioning the issue at all.
Some insurers and pension providers are going it alone by setting up subsidiaries in EU member states but, again, no real-time information is being disseminated to those who might be affected. According to the Association of British Insurers, should nothing be fixed during negotiations, the sector will be left in an impossible position, as will its hundreds of thousands of clients. Another answer might be to sell all existing contracts to an insurer based in the EU, but the transfer of business would need be approved in a UK court and its timeline would be around 18 months.
In September last year, the government’s Treasury committee announced it would work with regulators to examine the scale of the issue, and might well call on industry representatives to answer and questions it may have. Subsequent to that announcement, the silence has been deafening.
Five months after the revelation that British expats might lose their pension and insurance payments post-Brexit due to the withdrawal of so-called ‘passporting rights’, no clarification has as yet been given. Passporting rights are in common usage by UK and EU financial advisors to provide products across all EU member states’ borders. Passporting is set to end in March next year unless the issue is dealt with to the satisfaction of both negotiating teams – a possibility which may not become a reality.
Should this happen, insurers and pension product providers will be caught between the rock of breaking their contracts to clients and the hard place of breaking the law. Whatever the hardship caused to product providers, it’ll be nothing compared with that endured by British investors and pensioners overseas. The issue is one of the harshest consequences of a hard Brexit or of the UK crashing out without a deal. It seems neither side has given the situation much thought, with the EU presenting no position papers and the UK not mentioning the issue at all.
Some insurers and pension providers are going it alone by setting up subsidiaries in EU member states but, again, no real-time information is being disseminated to those who might be affected. According to the Association of British Insurers, should nothing be fixed during negotiations, the sector will be left in an impossible position, as will its hundreds of thousands of clients. Another answer might be to sell all existing contracts to an insurer based in the EU, but the transfer of business would need be approved in a UK court and its timeline would be around 18 months.
In September last year, the government’s Treasury committee announced it would work with regulators to examine the scale of the issue, and might well call on industry representatives to answer and questions it may have. Subsequent to that announcement, the silence has been deafening.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
