Brit expats in EU to continue receiving annual pension increase

British pensioners resident in the EU can rest easy following the publication of government documents confirming that pension payments will continue to rise for expats.

Expat British pensioners who live in the European Union (EU) are to be reassured that their pensions will continue to rise each year after Brexit, reports the Daily Telegraph.

According to official documents released by the British government, British state pensions will not be ‘frozen’ in March 2019 – the month in which the UK is expected to leave the EU…

These fears grew from the fact that British expats who reside outside of the EU in places such as New Zealand, Australia, Canada and the USA do not see their pension payments rise each year with inflation. Instead, their weekly pension amount stays at the same value it was when they left the country.

For the many hundreds of thousands of British pensioners living in Spain, France, Italy and elsewhere in the EU, this announcement comes as welcome news. A great majority of retired Brits upped sticks to warmer European climes safe in the knowledge that their pension payments would continue to increase annually as they had done back home.

The government document also confirms that National Insurance (NI) contributions made while overseas will also continue to count towards the state pension, meaning that current expats who are not yet retired and still pay NI will reap the benefits of these payments.

The full state pension is currently worth £159.55 per week, and any Brit who has paid NI contributions for at least 35 years is eligible to receive it.

“The UK and EU have agreed that the UK will continue paying and uprating state pensions to UK citizens living in EU countries after Brexit, and vice versa,” said James Walsh of the Pensions & Lifetime Savings Association, a trade body that has lobbied on the behalf of expat pensioners.

“This means, for example, that British pensioners living in Spain will continue to get the same annual inflation increases they would have got in the UK. The same will apply to Spanish pensioners resident in Britain.”

Currently, British pensioners in Spain receive a state pension that increases by the so-called “triple lock”, which is an annual increase based on either inflation, earnings or 2.5% – whichever is highest. The mechanism ensures that pensioners do not see their income frozen, enabling them to keep pace with the rising cost of living.

Without this, many pensioners resident in Spain had worried that their living standards would gradually erode following Brexit. This announcement should, however, offer solid reassurances that the British government is aware of these pensioners’ situation, and is working closely with the EU to ensure that nobody comes off worse post-Brexit.

“The fact this has been agreed so early in the process indicates that pension payments are seen as uncontroversial, which will come as a relief to pensioners across the EU,” added Walsh.  Although of course, the whole Brexit deal has yet to be approved by British and European parliaments and governments.