The government has stepped up planning for a ‘no deal’ Brexit. Part of its preparations includes publishing guidance explaining the rights of UK nationals in the EU if the UK leaves without an agreement.
This ‘no deal’ guidance states that in a ‘no deal’ scenario:
- State pensions will continue to be paid to UK nationals living in the EU.
- However the government refuses to guarantee that it will continue to uprate state pensions after 2020. The government says it would like to continue uprating pensions in the long-term but will not commit to doing so until EU governments agree to reciprocal arrangements.
- UK-based firms “should have made plans to make sure you can still get payments from your annuity or personal pension” and they will contact customers if they need to make any changes.
The ‘no deal’ guidance does not cover occupational pensions but there is no suggestion that there will be any difficulty for these schemes to pay pensions to members wherever they retire to.
It is unfortunate that, instead of giving UK nationals living in the EU the reassurance they need, the government has decided to use them as a bargaining chip instead.
Clearly a ‘no deal’ Brexit is a contingency that is being planned for but government policy is to leave with an agreement.
Under Article 31 of the withdrawal agreement the UK and EU have committed to continuing social security coordination arrangements. This includes:
- Uprating of state pensions.
- Counting contributions in other countries against minimum eligibility criteria.
The withdrawal agreement only covers UK nationals living in the EU at the date of withdrawal but the intention is to negotiate similar protection for people moving between the UK and EU after the withdrawal date.