UK State Pensions & No Deal – a BiE Paper

UK State Pensions and other benefits – what the UK should do in a No Deal scenario

Following notification that the UK has committed to only uprating UK State Pensions until 2019/20, British in Europe have published the following paper in preparation for discussions with the UK Government.

Executive summary

  • The UK has committed to uprating UK State Pensions payable to UK nationals living in the EU only as far as 2019/20.  It has expressed a desire to continue to do so thereafter  but only “subject to reciprocity”.
  • The UK’s policy of not uprating State Pensions for those resident outside the UK save  where obliged by “reciprocity” to do so is itself irrational and unjust to those who have  earned a pension by paying contributions and taxes to this country.
  • The UK State Pension is already the lowest in all the OECD countries.  To refuse to  increase that does not merely add insult to injury:  it causes massive hardship to the  poorest pensioners in the civilised world.
  • Moreover those living in the EU are already hit by a fall of one fifth in the value of  their pensions following Brexit:  this decline in the value of Sterling is predicted to  continue for at least the medium term following a No Deal Brexit.
  • To extend this policy to those who paid UK contributions and taxes and moved to an EU country during a period when the UK did uprate the pensions of those resident inthe EU would be outrageous:  there can be no justification for moving the goalposts  for this vulnerable group when it is too late for them to do anything about it.  They have a legitimate expectation that they will receive uprated pensions as long as they  live in the EU.
  • But equally, all those who made significant contributions in the UK before moving to  another EU 27 country to work did so with the legitimate expectation that when they  retired, their UK pension would be uprated.
  • The UK’s departure from the EU will unravel the complex interlocking mechanisms for  the aggregation of social security contributions by those who work in several EU  countries.  The Government must confirm that after Brexit:
    • it will continue to pay benefits based on aggregated contributions and allow  them to be exported;
    • that, so far as benefits for which it is liable are concerned, it will ensure that  beneficiaries who worked in the UK before Brexit are not in any way prejudiced  by a failure to have achieved a minimum contribution level/period;
    • that it will use its best endeavours to reach urgent agreement with the EU on  a resurrection of the aggregation scheme, at least in so far as is necessary to  ensure the aims set out above.

Download the full paper HERE.