Brexit could result in British pensioners living in the European Union (EU) not receiving their annual state pension increases.
The UK government has only agreed to pay pension increases on a reciprocal basis, which would require other EU countries to agree to pay for the increases to British pensioners living in their countries, while the UK pays for increases to EU pensioners living in the UK.
However, former Pensions Minister, Baroness Ros Altmann, explained that there would be “little incentive” for other nations in the EU to pay for British retiree’s pension increases, “because so many more of our people choose to live in countries like Spain and France, while hardly any of their citizens choose to retire over here”.
She continued: “There are 70,000 British people receiving state pensions in Spain, but only 62 Spanish pensioners in the UK.
“With such a massive imbalance, the temptation for Spain to make demands that our government could find unacceptable is obvious.”
There are around 340,000 British pensioners living in the EU, while only 85,000 EU residents over the age of 65 were working in the UK.
Although there would be some retirees from the EU living in the UK that are under 65, this number is likely to be relatively insignificant, resulting in EU countries facing large costs in comparison to the potential costs to the UK.
Altmann added: “The risks to people's state pensions were never made clear. Failing to explain risks properly, before they make decisions which could impact their pensions, is against the rules, but somehow when it comes to Brexit, many rules of normal practice are overridden.
“Surely it is important that people know what the implications are. But of course it would have been better to explain these in advance to voters.
“What will people feel when they find out more of these hidden consequences of Brexit? We shall see.”
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