Relief for expats in EU as threat to pensions is lifted
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.