Expats promised state pension uprating until 2023 in no-deal Brexit

UK expats in EU countries will continue to have their state pensions uprated in a no-deal Brexit scenario, the government has said.

However, the uprating of their state pensions has only been guaranteed until March 2023.

The Department for Work and Pensions announcement could result in benefit losses of nearly £50,000 over 20 years to individuals.

The plans were met with criticism by Royal London director of policy, Steve Webb, who stated: “This attempt to reassure British pensioners living in the EU will actually have the opposite effect.

“They have received repeated assurances that their pensions would be increased each year regardless of the outcome of the Brexit process.

“Today’s announcement of a time-limited guarantee will be deeply worrying to British ex-pats living in the EU.”

There are currently around 500,000 UK citizens living in the EU and benefitting from the state pension triple-lock, which increases state pension income in line with the highest average earnings, inflation or 2.5 per cent annually.

AJ Bell senior analyst, Tom Selby, added: “A no-deal Brexit creates troubling financial uncertainty for UK expats who have pursued their dream by retiring to EU countries such as Spain or France.

“At the moment the UK’s membership of the EU means people moving to Europe automatically benefit from state pension uprating in line with the hugely valuable triple-lock.

“Anyone who is currently retired on the continent, or is considering doing so in the coming years, should factor in the possible loss of state pension uprating into their income planning.”

Assuming that the flat-rate state pension is frozen at the 2019/20 level of £8,767 per year and compared to a state pension updated by 2.5 per cent annually, the total income over 20 years would be £175,344, compare to £223,955.

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