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UK pension benefits after the UK leaves the EU

Question

I have received the following information from the UK Pension Service in Newcastle (Pension Centre International Group):
"UK state pension will continue to be paid after the UK leaves the EU. If, after the UK leaves the EU, I continue to live in an E.E.A. state my current entitlement to increased pension benefits, as declared annually by the UK government. we will continue only for 3 years up to and including 2022/23. However, the government plans to negotiate an agreement to ensure the state pension will carry on being uprated in the longer term."
Surely, one's entitlement to a state pension derives from the amount of national insurance contributions one has paid-up and does not depend on the country of residence. This is clear from the fact that the government will continue to pay a state pension. What is not clear is why an exception should be made for the portion of benefits derived from annual increases declared by the government.

Can anyone tell me why should residence in a foreign country affect state pension entitlements?

Oppressed in Oppem

There are two answers to this. The legal one is that uprating is guaranteed by UK law and this only applies in the UK; all you can legally get outside the UK is therefore the basic state pension unless the UK govt has committed itself, by agreement with the country in which you live, to uprate pensions.

The practical one is that the UK govt doesn't really care about those of us who are living outside Britain, especially those who no longer have the right to vote. We must be one of the only countries in the world that doesn't allow nationality to be passed on if the parents are 2nd generation UK nationals living abroad.

Feb 23, 2020 23:38
anon

"There are two main reasons for not paying annual up-ratings to non-residents. First, up-ratings are based on levels of earnings growth and price inflation in the UK which have no direct relevance where the pensioner is resident overseas. Second, the cost of up-rating state pensions overseas in countries where we do not currently up-rate would increase immediately by over £0.5 billion per year if all pensions in payment were increased to current UK levels."

"The policy on the up-rating of UK State Pensions paid to recipients living outside the UK is clear and is a long-standing one of successive Governments since WW2. The annual index-linked increases are paid to UK State Pension recipients where there is a legal requirement to do so. For example, where UK State Pension recipients are living within the European Economic Area, Switzerland and Gibraltar or in countries where there is a reciprocal agreement in place that provides for the uprating of the UK State Pension. The Government has no plans to change this policy."

See here:
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN01457

and the update re: Brexit:
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7894

Feb 24, 2020 09:20
wezembeekwanderer

Worth noting that if you go back to live in the UK, you can get it index linked again, or so I am led to believe from previous comments here.

My UK pension has increased by 10% since Boris came to power. It could decrease by 30% if everything goes pear-shaped. Such is the life of an expat.

Feb 24, 2020 09:36
becasse

The treaty under which the UK left the EU guarantees in perpetuity the existing pension rights, including indexation, the S1 form health rights and the EHIC, of those citizens of both parties who are resident in one of the countries of the other party (to the treaty) before the beginning of 2021.
The document from the UKPS in Newcastle stated the position in the event of the UK leaving the EU with no deal (ie treaty) - that didn't happen.

Feb 24, 2020 10:36