However, they might be able to get some peace of mind after members of the UK parliament (MPs) endorsed an amendment on 27 February 2019, that could protect their pension and their overall legal rights, after the Brexit deadline.
In fact, MPs have instructed the government that the part of the withdrawal agreement, negotiated by prime minister Theresa May, regarding citizens’ rights should be kept even if the UK drops out of the EU without any deal or agreement.
The move comes after many expats that relocated to the EU were facing having their pensions frozen in the event of a no-deal Brexit, as they could lose their ‘special status’.
UK state pension
While the UK already has reciprocal agreements with most of the EU27 – the legal agreement that allows state pensions to be uprated even if not living in the UK – they would lose annual ‘triple-lock’ increases.
Under the triple-lock, state pensions go up annually according to the rate of inflation, earnings or 2.5%, depending on whichever is higher.
That would mean that if the UK leaves the EU without a deal, expats would lose both the triple-lock protection and uprates, with their pension being ‘frozen’ at the level it was at the end of March 2019.
However, if the amendment is passed in parliament, UK expats would still be able to benefit from annual increases in their pensions.
“Currently as a member of the EU, the UK is party to provisions which co-ordinate social security schemes for people moving within the EU,” said Jason Porter, director of expatriate financial planners Blevins Franks.
“The joint report on Brexit progress said that, while ‘nothing is agreed until everything is agreed’, the withdrawal agreement would include a continuing commitment to social security co-ordination.
“The parliamentary amendment reinforces this.”
Pensions still uprated through 2020
“Prior to the introduction of EU social security coordination, the UK had a network of reciprocal agreements with most EU member states and these made provision for annual increases in state pensions,” Porter added.
“The government has said that in a no-deal scenario, it will continue to uprate state pension payments for 2019 and 2020, but thereafter it will only do so if reciprocal agreements are renegotiated with either the EU as a whole, or with each EU 27 member individually.”