Brexit sparks renewed questions over expats’ frozen state pensions
A Scottish MP yesterday asked the government to reverse the freeze on pensions of UK retirees living abroad.
Ian Blackford, the SNP’s pensions spokesperson and vice-chair of the all-party group, on Wednesday led a backbench debate on the subject. He said: “It is morally unjust and completely unfair for the Tories to strip pensioners of their right to equal state pension payments – it is an absolute disgrace that there are more than 550,000 older British people living abroad who are at risk of real hardship and poverty in older age because their pensions are frozen at the rate they were first paid out at.
“These retirees have contributed to the British economy and they don’t deserve to have their pensions paid at a lower rate to those in the UK.”
The so-far ineffective fight by British expat pensioners to get their frozen state pensions upped each year, could be moving into a new phase in light of a possible Brexit.
Indeed, Wednesday’s debate in the House of Commons focused on the subject of the state pensions of individuals living overseas in locations such as Australia, New Zealand, Canada and South Africa, and whether they should be increased at the same rate as UK-based pensioners.
Despite a fruitless legal challenge in 2010 – even going up to the European Court of Human Rights – expat pensioners continue to push for change. This latest debate is in answer to the ongoing pressure.
However, with regards to Brexit, should it go ahead, there are concerns we could see the state pensions of Brits retiring in the EU being reduced considerably, according to many experts.
This would be the result of the UK possibly being forced to set up individual, reciprocal agreements with each country, pertaining to the pensions of expats residing there. However, should no agreement be in place with a certain country, individuals’ state pensions could indeed be frozen.
As it stands now, pensions of those who retire to countries within the European Economic Area are increased at the maximum rate offers to UK-based state pensioners.
Therefore, there are, rightly so, strong fears that should Brexit go ahead, expat pensioners considering a move to Europe could feel their hands are tied.
Should there be no annual pension uprate as a direct result of Brexit, individuals could be losing out on thousands of pounds throughout their retirement.
Even if there are hopes the government will arrange pension protection for expats in light of Brexit, Britain hasn’t undertaken any comparable arrangements for decades, mainly due to hefty costs.
Nevertheless, the subject of how UK pensioners within the EU will be affected ahead of Brexit is somewhat hazy, as seems to have been acknowledged by the government. Therefore, the issue must be addressed within the negotiations of the UK’s departure, if the Vote Leave campaign is victorious.