What impact will Brexit have on my pension?

Last updated: 03 Mar 2020

When talking about the potential direct impact of Brexit on pensions there are three main areas to consider: state pensions, defined benefit pension schemes and pensions paid by insurance companies.

Defined benefit pension schemes

Many people receive a pension directly from a defined benefit pension scheme. This can be a public sector scheme (such as the civil service pension scheme) or a private sector scheme (such as the British Telecom Pension Scheme). The Pension Protection Fund also pays compensation to its members on a similar basis.

These schemes currently pay pensions and compensation to members around the world whether they have retired to a country in the EU or outside it. There is no reason to believe they will not be able to continue doing so after Brexit.

Pensions paid by insurance companies

This brings us to the issue of pensions paid by insurance companies. The possibility of people living in the EU who are in receipt of personal pensions facing difficulty in being paid was raised last year by the chair of the Treasury select committee.

Those arose again when the Director General of the Association of British Insurers (Huw Evans) appeared in front of the Exiting the European Union Committee. The transcript of the evidence given to the committee makes for interesting reading.

It’s clear that the Director General was highlighting a solvable issue that was being highlighted to nudge regulators and officials into action than to warn members of the public with personal pension schemes.

Headlines from the time about it potentially being illegal to pay pensions to people in the EU after a no-deal Brexit relate to a story about just one type of pension (insurance-based personal pensions paid to a bank account in an EU country) and even the person actually raising the risk said it was “sortable”.

The UK Government made clear in its no deal guidance published before the updated withdrawal agreement that UK-based firms “should have made plans to make sure you can still get payments from your annuity or personal pension” and they will contact customers if they need to make any changes.

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