State Pension  

Govt writes to expats about pensions uprating

Govt writes to expats about pensions uprating

The Department for Work and Pensions is writing to more than 363,000 pensioners living in the EU informing them about pensions uprating after Brexit.

The letters, which will be sent out next week, outline that even without a deal, pensions will be uprated for a further three years.

Pensioners will not need to do anything to continue receiving their state pension in that time.

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FTAdviser reported earlier this month that the government has committed to increasing the pension benefits paid to Brits living in the EU each year until March 2023, according to the triple lock rules.

Under this system the state pension increases each year in line with whichever is the highest: consumer price inflation, average earnings growth, or 2.5 per cent.

During the three-year period, the UK government plans to negotiate a new arrangement with the EU to ensure that uprating continues, the DWP stated.

Thérèse Coffey, secretary of state for Work and Pensions, stressed that pensioners in Europe “who have paid into the system for years deserve peace of mind over their future finances”.

She added: “Not only are we providing much-needed reassurance for hundreds of thousands of retirees, we’re ensuring we are fully prepared for leaving the EU on October 31.

“No matter the circumstances of Brexit, we’ve made sure that pensioners do not need to take any action to continue receiving their hard-earned state pension.”

The DWP has established a dedicated call centre to answer any questions from those affected.

According to Jon Greer, head of retirement policy at Quilter, the letters "will be cold comfort for many and simply serve to extend the period of uncertainty".

He said: "It remains to be seen whether the government will be able to negotiate a new arrangement to ensure this policy continues. At worst, it could result in state pensions being used as a bargaining tool in wider negotiations.

“With many people living into their nineties and beyond, a three year guarantee will be woefully inadequate and only serve to increase their anxiety.

"It is commendable that the government has set up a dedicated call centre as they need to ensure expats are well informed about this decision, what it means for their monthly income and present the alternatives well in advance of the three years expiring. This will allow expats to appropriately adapt their financial plans and give them enough time to prepare for new rules around their income growing.”

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