• Brits who retire abroad to EU countries will continue to have their state pensions uprated under No Deal Brexit plans outlined by the Government over the weekend
• However, state pension uprating has only been guaranteed until March 2023
• Over 20 years the loss of state pension uprating could cost someone almost £50,000
• Around 500,000 UK nationals living in the EU currently benefit from the state pension triple-lock, which increases the benefit in line with the highest of average earnings, inflation or 2.5%
Tom Selby, senior analyst at AJ Bell, comments:
“A No Deal Brexit creates troubling financial uncertainty for UK expats who have pursued their dream by retiring to EU countries such as Spain or France.
“At the moment the UK’s membership of the EU means people moving to Europe automatically benefit from state pension uprating in line with the hugely valuable triple-lock.
“To give you an idea of its value, over a 20 year retirement someone could lose out on around £50,000 in retirement income if their state pension was frozen at 2019/20 levels*.
“While this isn’t cause for panic, those affected shouldn’t stick their heads in the sand either. Anyone who is currently retired on the continent, or is considering doing so in the coming years, should factor in the possible loss of state pension uprating into their income planning.”
*Assumes the flat-rate state pension is frozen at £8767.20 (2019/20 levels) and compared to a state pension uprated by 2.5% a year. Total income over 20 years if state pension is frozen is £175,344, compared to £223,955 if state pension increases by 2.5% annually.