EU expats face state pension freeze post-Brexit

Nearly half a million people living in the EU will be affected in the event of a no-deal Brexit.

Under current rules, British pensioners in certain countries such as Australia, Canada and South Africa have their state pension frozen each year, but British pensioners in the EU get annual increases in line with pensioners living in the UK.

The UK state pension is uprated by either 2.5%, average wage growth or by prices growth as measured by the Consumer Price Index – whichever is highest.

The DWP announced that annual increases will only be guaranteed for the next three years, after which the Government ‘plans to negotiate a new agreement’.

Steve Webb, director of policy at Royal London, commented: "This attempt to reassure British pensioners living in the EU will actually have the opposite effect. They have received repeated assurances that their pensions would be increased each year regardless of the outcome of the Brexit process.

"Today’s announcement of a time-limited guarantee will be deeply worrying to British ex-pats living in the EU. If the UK leaves the EU on bad terms with the rest of the Europe there is no guarantee that a new uprating arrangement will be reached, and today’s statement offers no assurance to pensioners that annual increases will continue after that point."