Brexit, as we all know, is currently the much talked about topic in Britain and is something that’s not going to go away soon. But what is the impact of Brexit on overseas pensions for expats?
The State Pension
One issue yet to be resolved when the UK leaves the EU in spring of 2019 is the outcome of shared pension arrangements. Firstly, if you have worked in the EU for any significant period of time, or planning to, this may affect you.
For UK citizens to qualify for a full state pension 35 years of national insurance contribution or equivalent credits are required and the minimum requirement to receive some state pension is 10 qualifying years.
Currently working within the EU counts towards the UK state pension and this arrangement is reciprocal. It’s not clear at this moment in time if this will continue, however, the UK government has expressed a wish for the arrangement to remain after exit from the EU.
Nothing has yet been decided, but for the arrangement to last a deal is required between the UK and the EU. Many believe the state pension arrangement is unlikely to be a sticking point and a deal will be done.
Good news on pension increases for EU expats after Brexit
There is some light at the end of the tunnel, however, as the EU and the UK Government has agreed a position on pension increases. They announced that British pensioners who live in the EU will continue to get the agreed annual state pension increases after leaving the EU.
The agreement also covers people in countries part of the European Economic Area – Norway, Iceland, Liechtenstein and Switzerland.
This policy will have to be approved by British and European parliaments and governments, but it’s likely to go ahead.
If you live in other countries such as Australia, New Zealand, Canada and the US state pension increases will not rise in line with inflation and the ‘triple lock’ meaning their value will diminish more over time.
Brite are overseas pension experts. If you are concerned about your pension situation after Brexit, or would simply like to have an independent pension review then please contact us today and speak with one of our advisors.