Since the UK joined the EEC in 1973 the “legal requirement” on the government to up-rate the state pensions of British recipients living across the EEA has derived from the social security provisions of the single market. This means that EU resident pensioners currently receive the same annual increases as those living in the UK.
“Annual upratings of the UK state pension are paid abroad under the EC’s Social Security Regulations to pensioners who have a UK state pension and are living in the European economic area and Switzerland.”
Rosie Winterton MP, Minister for Work and Pensions (Oct 2008)
But when the UK leaves the EU and Single Market the Government will no longer have a “legal requirement” to up-rate state pensions. Without a new and reciprocal social security agreement agreed as part of the Brexit negotiations, 492,000 Europe resident British state pensioners will therefore face a frozen pension.
The Government has previously acknowledged that continued uprating rights will be reliant on the Brexit negotiations.
“The reciprocal entitlements that will apply following the UK’s exit are subject to the wider negotiation on our future relationship with the EU. We will approach the negotiations with the full intention of securing a deal that delivers the best possible outcome for the UK and its nationals”
Robin Walker, Minister for Leaving the European Union (Jan 2017)
“The reciprocal rights and entitlements that will apply following the UK’s exit are subject to the wider negotiation on our future relationship with the EU and the Government has not yet begun these negotiations”
Lord Henley, Minister for Work and Pensions (Jan 2017)
“The issue of what will happen if this country leaves the European Union has not yet been decided – but if there are reciprocal agreements and legal obligations to uprate, pensions will be uprated.”
Baroness Altmann, Minister for Pensions (Feb 2016)
When still Prime Minister, David Cameron said:
“Here is the reality: if we leave… the triple lock could no longer be guaranteed in the long term.”
David Cameron MP, Prime Minister, (Jun 2016)
More recently, Theresa May said that protecting expat rights will be a priority in negotiations, but the Government is not prepared to make a unilateral commitment.
There is no specific mention of expat state pensions in the Government’s Brexit White Paper, simply a general aspiration to “secure rights” and reach a “reciprocal deal.”
The key challenge is that the reciprocal social security provision was controversial during the referendum and remains a challenging aspect of the negotiations ahead.
The situation is complicated by the fact that the Government currently has no way of distinguishing between British expats and returned EU citizens who have worked in the UK.
“Entitlement to State Pension is based not on nationality but on a person’s national insurance contributions record. Therefore, from the information we hold on those in receipt of the UK State Pension in EU countries we cannot separately identify EU and UK nationals.”
Richard Harrington MP, Minister for Pensions, (Nov 2016)
Historically, the Government has taken quite a ruthless approach to those who have moved abroad:
“The Government… believe(s) that they must put the interests of pensioners living in the UK over the interests of those living overseas by restricting the availability of uprates to those living here or in a country where we have a legal or treaty obligation to provide them.”
Lord Freud, DWP Minister in the Lords, (Jan 2014)
Given the Government’s historic unwillingness to review its frozen pension policy for expats elsewhere, the future continues to be uncertain for those already in the EU.
How many would be affected?
There are currently 492,000 British State Pensioners living in the EU, EEA and Switzerland (subject to EU Social Security Coordination):
|Gibraltar (as EU)||1,780|
|Switzerland (opt in)||11,890|
Outside the EU, all face losing their right to up-rating adjustments.
A Brexit deal for EU resident pensioners
No one who voted for Brexit did so because they wanted the rights of British pensioners who have made their life in Europe, or others who might want to move there in the future to have their rights reduced.
At the very least the government should provide reassurance to worried EU resident British pensioners immediately, and make protecting their state pension rights a priority in the Brexit negotiations.
Pension parity for all overseas pensioners
Once we’ve left the EU, how can it be fair to give those who live on the continent a better deal than those who live in other countries?
As Britain looks to a new global role, and becomes increasingly reliant on other countries for trade, it is only fair to support our pensioners equally wherever they reside.
Britain is now out of step with other developed countries in not offering universal pension uprating. It’s a national embarrassment that we leave so many of our citizens to live on a diminishing income and we should take the opportunity of Brexit to sort out this longstanding injustice.