Govt confirms EU pension liability share of £8.5bn

The UK government has confirmed that it expects the UK’s share of the European Union’s (EU) pension liabilities to total €9.75bn (£8.5bn), as estimated by The Office for Budget Responsibility.

Responding to a parliamentary question, Lord Bates said that the UK’s liability share “shall be a percentage calculated” as the ratio between the EU Budget contributions “made available by the United Kingdom in the years 2014 to 2020” and will include the EU Budget contributions “made available during that period by all member states and the UK”.

The question, posed by Lord Stoddart, asked the government “whether the share of pension liabilities to which they have agreed as part of the UK's departure from the EU is based on the full budget share of those liabilities, or the number of British staff employed by the EU up to and until exit day”.

Bates confirmed that the UK will be liable to the EU for its share of the financing on the liabilities incurred by the EU “until 31 December 2020, including pensions”.

This is as it was set out in the proposed Withdrawal Agreement and part of the Financial Settlement, first published in November 2018.

A National Audit Office report, Exiting the EU: The financial settlement – follow-up report, detailed that the biggest EU liability that the UK will contribute to is its pension liability, and it is expected to be contributing to the EU pension liability until at least 2064.

In the report, the Treasury estimated that the EU’s total pension liability in 2020 to total €77.2bn (£67.1bn).

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