470,000 British nationals living in the EU could risk having their state pensions frozen if a deal is not reached with the EU
The government has stated its intention to continue to provide UK nationals living in the EU their state pension rights if there is a no deal Brexit.
In a policy paper on citizens’ rights in the event of a no deal Brexit, Brexit secretary Stephen Barclay pledged to continue to preserve certain rights of UK nationals living in the EU.
The paper stated that where it is in its control, the UK will also continue to preserve certain rights of UK nationals in the EU, for example by continuing to pay an uprated UK state pension to eligible UK nationals living in the EU.
This refers to the UK’s triple lock policy that increases the state pension by earnings, inflation or 2.5%, whichever is higher.
However British nationals’ pensions rights could be negatively affected if a deal is not reached with the EU. As a result, 470,000 Brits living in the EU could risk having their state pensions frozen.
AJ Bell senior analyst Tom Selby said at the moment these people receive the generous ‘triple-lock’ uprating, meaning their state pension rises in line with the highest of average earnings, inflation or 2.5%.
While the government has strongly signalled its desire to continue paying these increases in the event of a No Deal Brexit, this will only happen if the EU reciprocates by uprating the state pensions of EU nationals living in the UK.
Expats’ pension rights could be compromised if the EU as a bloc doesn’t reciprocate. If this is not agreed with the EU collectively, the UK will then have to reach an agreement with each of the 27 member states, the paper stated.
Selby said this could be a painfully drawn out process with no guarantee of success.
The report added that if UK nationals were unable to live their lives as they do now in a no deal Brexit and returned to the UK, there are a number of steps the government would consider to address concerns that have been raised.