Brexit secretary Stephen Barclay has pledged to increase state pensions of UK nationals living in the European Union (EU) in the event of a no-deal, though the EU must reciprocate the agreement.
However, if the EU as a bloc does not reciprocate, the UK will most likely have to negotiate deals with each of the 27 member states.
Commenting, AJ Bell senior analyst Tom Selby said: “Today’s statement from the Brexit Secretary lays bare the uncertainty facing almost half a million UK nationals who live in the EU and are currently eligible for valuable state pension increases.
“At the moment these people receive the generous ‘triple-lock’ uprating, meaning their state pension rises in line with the highest of average earnings, inflation or 2.5%.”
If the UK does not strike a deal, either with the EU or with individual member states, the state pension triple-lock increases could potentially be lost, while approximately 470,000 UK nationals living in the EU are at risk of having their state pensions frozen.
“While the Government has strongly signalled its desire to continue paying these increases in the event of a No Deal Brexit, this will only happen if the EU reciprocates by uprating the state pensions of EU nationals living in the UK.
“If a deal with the EU as a whole cannot be reached then the UK will likely have to negotiate reciprocal deals with each of the 27 member states. This could be a painfully drawn out process with no guarantee of success,” Selby concluded.
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