UK expat private pensioners concerned over lack of news on passporting rights

Fears over the post-Brexit loss of access to private pensions are stalking the British expat community overseas.

At the present time, cross-border financial services allow the ‘passporting’ of private pensions from the UK to all other EU member states, a facility which will cease once Brexit is a done deal unless special arrangements are put in place. Of course, the same rule affects many other essential financially related movements, but British pensioners living in EU member states are focused on the possibility of their lives being wrecked. Since the referendum, many questions have been asked about this pending disaster, but neither side has come up with an answer. Time is now getting short, and Brit pensioners are getting desperate for reassurance they won’t be left out in the cold.

John Barlow, a long-term Brit who’s lived in Madrid for 36 years, told the media he’d not even been able to vote in the referendum due to the 15 year disenfranchisement rule, adding that if his payments stop he’ll have to sell his house and attempt to live on the proceeds. Barlow is one of 38 million living across Europe with policies from UK insurers, including a large number of expats drawing personal pensions. At present, all are covered by the EU’s passporting rights applied to financial companies, rights which are unlikely to survive Britain’s EU divorce. France and Spain hold the largest number of private pension recipients who’ll be hit unless negotiations ensure passporting continues. Without it, pension providers and insurers will be legally prevented from sending out payments anywhere in the EU, thus making policies dormant.

The British government’s negotiating team as well as the PM aren’t pushing to retain passporting, and financial companies have simply given up expecting a miracle as part of the final deal. Major insurers and pension providers are telling it like it is, saying that even the transition period is still a cliff-edge for companies and their clients. One says it’s all about the laws of each independent EU member state, making it unclear what individual agreements may or may not allow. British state pensioners are not at risk as state pension payments are exempt from the passporting rule, but life policies are at risk as they last for many years and may well run past the end of the transition period. If this happens, literally millions of policies would need to be rewritten.

Representatives of major insurers are frustrated at the prospect of having to spend millions to potentially cover possible outcomes which may not actually happen. One solution being considered is transferring at-risk policies to an EU subsidiary, but restructuring on this scale would involve court cases, legal opinions and literally millions in costs. Right now, insurers have two choices – breach contracts by not honouring payment promises or break European law by putting their customers first. According to private pensioner John Barlow, losing his payments is simply a breach of contract.