Starting next week some 360,000 British pensioners living in Europe will receive letters from The Department for Work and Pensions (DWP)  confirming that their UK State Pension pension will rise each year for at least the next three years in the event of a no-deal Brexit. There are no guarantees that these increases will continue after this time.

Historically any pensioners living in the UK and European Economic Area (EEA) have received annual increases in line with inflation but if the UK leaves the European Union those not living in the UK at the time they start receiving their UK State Pension may no longer benefit from these valuable increases. Other countries where the annual increases have applied include Gibraltar, Switzerland or a few others that have a reciprocal social security agreement with the UK. These do not include Canada, Australia or New Zealand.

The annual increase varies but is designed to ensure that the pension keeps its value in real terms when you factor in cost of living increases. Only this week there was an announcement that the increase for 2020 would be 4%, although it has tended to average at around 2.5% with a monetary value of up to £200 a year per person.

The DWP commitment means that the UK state pension paid to those living in the EU will be uprated each year until March 2023, should the UK leave the EU without a deal. During this period, the UK government plans to negotiate a new arrangement with the EU to ensure that the uprating continues but a no-deal Brexit will put these valuable increases at risk.

For those who have already retired in the EEA, or have plans to do so, this will lead to further uncertainty. There is no change expected for those who retire as UK residents

You can find information on making voluntary UK National Insurance payments to increase your UK State Pension here:

UK National Insurance payments & the UK State Pension – what expats need to know

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