Re­lief for ex­pats in EU as threat to pen­sions is lifted

The Daily Telegraph - Your Money - - OPINION - Sam Brod­beck

Bri­tish pen­sion­ers liv­ing in the EU will still re­ceive rises in their state pen­sion pay­ments each year af­ter Brexit, the govern­ment has in­di­cated. There had been fears that mil­lions of ex­pats who live in Europe would see their pen­sions “frozen”, mean­ing their value would be steadily eroded over time. This is the sit­u­a­tion in coun­tries such as Canada, Aus­tralia and New Zealand, where Bri­tish state pen­sion pay­ments to ex­pats are not in­creased each year in line with in­fla­tion.

But an of­fi­cial up­date, pub­lished qui­etly last month, con­firms that thegGovern­ment in­tends to con­tinue in­creas­ing state pen­sions to ex­pats in the EU af­ter the UK leaves in 2019. The up­date showed that Bri­tain and the EU had the same po­si­tion on an­nual in­creases: that they would con­tinue to be made as now af­ter Brexit.

In ad­di­tion, Na­tional In­sur­ance con­tri­bu­tions made while abroad will also con­tinue to count to­wards the state pen­sion. You get the full state pen­sion, worth £159.55 a week, if you have 35 or more “qual­i­fy­ing” NI years on your record.

James Walsh, of the Pen­sions and Life­time Sav­ings As­so­ci­a­tion, a trade body, said: “The UK and EU have agreed that the UK will con­tinue pay­ing and up­rat­ing state pen­sions to UK cit­i­zens liv­ing in EU coun­tries af­ter Brexit – and vice versa.

“This means, for ex­am­ple, that Bri­tish pen­sion­ers liv­ing in Spain will con­tinue to get the same an­nual in­fla­tion in­creases they would have got in the UK. The same will ap­ply to Span­ish pen­sion­ers res­i­dent in Bri­tain.”

The agree­ment also cov­ers peo­ple in coun­tries in the European Eco­nomic Area – Nor­way, Ice­land and Liecht­en­stein – as well as Switzer­land. As with other pol­icy areas, the whole Brexit deal will have to be ap­proved by Bri­tish and European par­lia­ments and gov­ern­ments. But it is thought the agree­ment over the state pen­sion is un­likely to be a stick­ing point now a deal has been struck.

“The fact they have been agreed so early in the process in­di­cates they are seen as un­con­tro­ver­sial, which will come as a re­lief to pen­sion­ers across the EU,” said Mr Walsh.

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