In the event of a no-deal Brexit, UK pensioners living abroad in Europe or those with EU-pension entitlements may lose access to their pensions.
This stark warning came from the government when discussing the effect a “no-deal” could have on the banking, insurance and other financial services sector.
According to the government, the problem arises due to the UK losing access to the EU’s passporting regime in a no-deal scenario.
Following this bleak announcement, Stuart Price, partner and actuary at Quantum Advisory, looks at how this could be avoided.
He said: “Firstly, it’s important to note that the government maintains that a no-deal outcome is unlikely, so everything in its notes about what may or may not happen is purely speculative.
Under the current regime, UK firms can make payments into bank accounts in the European Economic Area (EEA) and the same applies in the opposite direction.
Following a no-deal, UK firms based in the EEA that currently ‘passport’ into the EEA, will be unable to make payments to the EEA, while EEA-based firms will be unable to pay into UK bank accounts.
So, for those UK pensioners living abroad, the pension payments they receive from the UK would not be able to be paid to them.
Price added: “According to the government they are doing everything in their power to minimise disruption post 29 March and this includes implementing a Temporary Permissions Regime (TPR).
“The TPR will allow EEA firms that currently passport into the UK to continue to do so until 2022 while they apply for full authorisation from UK regulators.
“However, if you are living abroad and are receiving a UK pension, I would recommend that you keep a close eye on developments.”