Government clarifies hard Brexit pension plans

The government has confirmed Britons living in the European Union will continue to receive the state pension after a no deal Brexit but uprating will depend on the divorce deal reached.

In guidance published today (December 18) the Department for Work & Pensions stated the UK leaving the EU would not affect entitlement to the UK state pension and that it was committed to uprating across the EU in 2019 to 2020.

But beyond that period uprating will depend on whether the EU reciprocates.

The DWP stated: "We would wish to continue uprating pensions beyond that but would take decisions in light of whether, as we would hope and expect, reciprocal arrangements with the EU are in place."

On annuities the government stated it expected providers to have made plans to make sure their clients can still get payments from their annuity or personal pension, even if the UK leaves the EU without a deal.

In September MP Nicky Morgan, head of the Treasury select committee, warned after Brexit insurers may not be allowed to pay out on cross-border contracts already in place.

In a letter to chancellor Philip Hammond she wrote: "The possibility that UK providers may not be legally able to pay out pensions or insurance contracts to citizens in the EU — including UK expats — is a stark example of the consequences of a ‘cliff edge’ Brexit."

The government stated: "If you live in the EEA and have an annuity or personal pension with a UK-based firm, your firm should have made plans to make sure you can still get payments from your annuity or personal pension, even if the UK leaves the EU without a deal.

"If your firm needs to make any changes to your annuity or personal pension or the way it provides it, your firm should contact you.

"If you have any concerns about whether you might be affected you should contact your firm."

The government also confirmed UK nationals would continue to get their benefits transferred to EU countries, including child benefit and disability benefit post Brexit.

It added the UK would call on the EU and its member countries to continue their commitments to EU citizens and protect the rights of UK nationals living in EU countries.

 

Source: FTAdviser