Effects of Brexit on UK Pensioners Living Abroad
Brexit, the decision taken by the UK people to exit the European Union is the hottest topic of debate in the country right now. There is a lot of confusion regarding the aftermath of this highly unexpected choice made by the British people. A number of people are fearful that this would have a negative impact on the economy of the country. While these fears haven’t materialized yet, there are concerns that linger on. In addition to the people within UK, Brits living abroad are also monitoring the post Brexit situation closely. UK Pensioners living in European countries for instance are concerned how this decision would affect their earnings.
While the UK was part of the European Union, a number of Brits found it lucrative to move to the sunny climate offered to them by European countries. A large contingent of British people is currently residing in different European countries. A great number of these expats have even retired and are living in these countries on their state pensions. It is these pensioners who are most worried after the Brexit as they don’t know how it will affect their pensions. The following are some changes that Brexit might cause to their pension.
• Currency Swings Might Decrease Pensions
One of the effects of Brexit that has most UK pensioners living in the EU region worried is that of the depreciating value of the Pound Sterling. They are worried that this might cause a drop in their pensions too. This concern is a valid one. Currency manipulations can have an effect on the pension of the expats. If the Pound’s value goes down considerably then there is a chance that the UK pensioners would see their pension earnings lessened. Latest reports suggest that the Pound is losing value so it is highly likely that it would cause a decrease in the paychecks received by the expat pensioners.
• Pensions Might Not Rise Annually
Until the time the UK was part of the European Union, UK pensioners living in the European Economic Area enjoyed annual rise in their pensions. The reason for this was that their pensions were tied to inflation rates and increase in wages. This was one of the reasons why most expat pensioners had chosen to live in European countries in the first place. However, with the Brexit decision this might all change. The UK pensioners living in the European Economic Area might not see their pensions rise as Britain no longer remains a part of the EU.
• Pensions Might Get Frozen
Another effect that the Brexit might have on UK pensioners is that their pensions might get frozen. This means that their pensions would become static at one rate and won’t rise further. This is how the UK pensioners are treated if they take the decision of residing in Canada. This decision however remains with the UK government and how they want to proceed with the renegotiation process that would have to start once the Brexit takes full effect. You can get the National debt line contact telephone number from this website and call them to find more help on this matter.
• Curtailment of Pensions
It is to be expected that the UK pensioners living in European countries would have to bear some pension cuts. They would not see any increase in their pensions that is for sure. Moreover, they might have to settle for lesser pensions in the coming years too. So, unless the Pound remains strong throughout post Brexit and does not depreciate below the Euro, there is no way that the Brit expats won’t see a curtailment in their pensions. However, this all depends on how the British government tackles the situation after the Brexit and how well the UK economy performs in the immediate aftermath of this decision.
Effects of Brexit on British Pensioners in Portugal
While the situation for British pensioners in most countries of the EU is a cause of concern, it is not that threatening at the moment. However, this is not the case for those living in Portugal. The reason for this is that Brit expats had been enjoying great tax benefits in Portugal thanks to the Non-Habitual Residents (NHR) program. With the UK leaving the EU though, this might change. They won’t be able to enjoy the tax exempt. Not only would their pensions go down, they would even have to start paying taxes on them too. Not many pensioners are happy with this change and the overall effects of Brexit on their lives; however, there isn't much that they can do about it.