Those who have retired to Spain or France could see their pensions frozen as a result of Brexit.
The Government has confirmed that these pensions would only be increased on an annual basis if the host countries reciprocate.
This would require other EU countries to commit to paying for British pensioners’ increases, while the UK pays the increase on the pensions of EU citizens who have retired here.
However, pensions campaigner Ros Altman points out this would be hugely costly for the EU, particularly for the governments of Spain and France, which have the biggest numbers of retired British pensioners.
In total 340,000 British pensions have retired to the EU, while there are only 5,500 citizens from the entire larger EEA area that have retired in the UK.
There are particularly marked imbalances when it comes to Spain, France and Ireland. For example there are 70,000 British people receiving the UK state pension in Spain. In contrast there are only 62 Spanish pensioners in the UK.
Many non-EU countries refuse this reciprocity and there has been a long-running campaign to get the UK to agree to increase State Pensions in other countries, regardless of the actions of their host nation.
However, this campaign has never succeeded and after a series of court cases, the Government’s refusal was upheld. It is only legally required to uprate if there are agreed reciprocal arrangements.
Altman says: “This puts the pensions of those who have retired to Europe at risk and it could impact April’s planned annual increase.
“With such a massive imbalance, the temptation for Spain to make demands that our Government could find unacceptable is obvious.”
She adds that this situations could arise whether we end up with a no deal Brexit or the Prime Minster’s agreed deal, which would still require negotiations on this issue.
She adds: “The risks to people’s State Pensions were never made clear. Whatever your views on Brexit it is surely important that the truth about the implications for people are made clear, rather than being hidden away.”