Does Brexit Pose a Threat to Retirement Income for some British Expats?

Jul

31

UK

Possible changes to social security agreements post-Brexit could have an unforeseen impact on the retirement income of British citizens planning to move overseas to retire.

Countries in the EU have reciprocal social security agreements with the UK, which means the state pension is to increase each year in the same way as retirees living in the UK.

However, these arrangements are currently not in place in countries including Australia, Canada and New Zealand.

Warnings are being made that any changes to reciprocal social security agreements, because of Brexit negotiations, could end up having a detrimental effect on retirement incomes and urges retiring expats to seek financial advice.

It is possible that a person retiring to Australia in 2008 would have seen their UK basic state pension frozen at 90.70 GBP.

However, the basic pension rate has gone up by 39 per cent to 125.95 GBP per week during the last ten years, which is worth an extra 1,833 GBP per year to those who stayed in the UK.

In September 2014, there were 1.24 million people in receipt of a state pension outside Britain.

Of these, about 560,000 were in countries where the state pension is not up-rated, including Canada, New Zealand and Australia.

The government has estimated that up-rating frozen pensions in payment to current levels would cost more than 500 million GBP per year.

Trudi Hayes

The Author

Trudi Hayes

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