"Get the latest tips about how to manage you wealth"
FOCUS BACK ON PENSION ENTITLEMENTS FOR EXPATS IN THE EU
Close to One Million British citizens living in the European Union are still faced with pension uncertainty, since receiving state pension in other countries remains part of existing treaties, which are threatened by Brexit, reports the FT this week.
The Office for National Statistics (ONS) has released new figures this week which show that there are close to 790,000 Brits living in the EU mainland and a further 112,000 British citizens living in Ireland.
In total, approximately 220,000 are estimated to be aged 65 and over.
Of the top five EU destinations for British citizens, Spain leads with 293,500 people. France follows with 152,900, Ireland with 112,000, Germany with 96,500 and the Netherlands with 45,300.
Existing EU treaties support the accumulation and receipt of the British state pension, for British citizens living elsewhere in the EU, and this means that contributions towards another EU country’s state pension system during the individual’s working life can be used to enhance the saver’s entitlement to a British state pension.
Currently, an EU citizen only needs to make one state pension claim at retirement, regardless of their working history within the EU.
A British citizen in receipt of a British state pension elsewhere in the EU, will currently see their pension payments increase in line with recipients who remain resident in the UK – currently governed by the triple lock system.
That system ensures that the state pension increases each year in line with whichever is the highest: consumer price inflation (CPI), average earnings growth or 2.5 per cent.
In theory we have 347 days to go until the UK leaves the EU and there are still many issues to be agreed between now and then.
One of those issues is the future of the state pension for British citizens living in the EU. At the moment, both the UK and the EU have expressed a desire to see the continuation of the current state pension rules but there is always nervousness of potential change until everything is agreed.