EU based retirees fear loss of UK state pension increases

Published:  19 Aug at 6 PM
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Many thousands of UK state pensioners living in the EU fear losing their rights to regular pension increases due to the post Brexit fallout.

The expat communities of Spain and, to some extent, France, are crammed with UK citizens who’d made the choice between poverty in Britain and comparative comfort abroad. Many sold their UK homes in order to buy an apartment in one of the Andalusian coastal resorts, and have been living within their means on just their UK state pension.

With the advent of Brexit, their financial security may be a thing of the past, even if they are allowed to remain in EU member states. Not only the erosion of their pension payments due to a further fall in sterling, but also the very real threat of frozen pensions are threatening their lifestyles and wellbeing. Another threat is the removal of the European Health Card giving access to free heathcare in EU member states.

Real fears are surfacing that EU based expats will be subject to frozen pensions as are the vast majority of British retirees living elsewhere in the world. Of the million British pensioners living outside the country, 50 per cent are existing on frozen pensions, stuck at the current payment rate when they left the UK. Many are residents in Australia, Canada, India, Africa and the Caribbean, and the rule is causing financial hardship across the board as second state pension top-ups are also frozen at the point of departure.

Despite several attempts to change the unfair exclusion, all of which failed at high court levels, many fear the British government would welcome the chance to save even more money by freezing every pension being drawn overseas. According to John Markham, head of the International Consortium for British Pensioners, (ICBP), the government’s position on the issue remains at best unclear, with many fearful pensioners believing it’s intransigent.

Markham stated recently that government ministers maintain the only way universal uprating will take place is by legal obligation. He adds that six EU member states, Luxembourg, France, italy, the Netherlands and Belgium, have reciprocal social security agreements with the UK, all predating the formation of the EU. It’s possible, he believes, that Brit retirees in those countries might not be subject to a pensions freeze.

Another way forward, according to financial analysts, would be a reciprocal pension agreement involving the entire EU bloc. This would allow EU expats in the UK as well as UK expats in EU countries to receive relevant pension updates when applicable. The solution would avoid the expense to the UK government of providing a swathe of retired returnees with their health, housing and social services needs.
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