Ex-pats fear for their pensions post-Brexit

Ex-pats in Europe are becoming increasingly concerned that their pensions could be frozen, with one expert calculating that people could lose up to £50,000 each as a result.

Currently, Brits retiring to the EU receive the same pension rises as they would in the UK. Under the so-called triple-lock system, this guarantees an annual rise matching wage inflation, price inflation or 2.5%, whichever is the highest.

Meanwhile, however, retirees to non-EU countries face different sets of rules. Some, in countries including the US, the Philippines and Turkey, benefit from the triple-lock.

However, those in most countries - Australia, Canada, New Zealand and South Africa - don't. Instead, their state pension is frozen at the amount it was when they retired, or when they left the UK if they were already pensioners.

And in the event of a Brexit, all bets could be off, with the UK forced to renegotiate deals with individual EU countries. Pensions of British ex-pats living in the EU could be frozen.

If this happens, investment firm AJ Bell has calculated, a 65-year-old receiving the £155.65 flat rate state pension would lose out on £50,000 in increases over 20 years.

"Brexit would throw the position of expat pensioners, or those who wish to retire to Europe, into doubt," the firm says in a statement.

"While some believe the government will be able to negotiate protections for expat pensioners in the event of Brexit, it is worth noting that the UK has not arranged a similar deal with a non-EU country since 1982, primarily because of the costs involved."

And the government certainly isn't making any promises, with pensions minister Ros Altmann recently telling parliament that there was "uncertainty about how a vote to leave the EU could impact on access to pensioner benefits for UK pensioners living in other parts of Europe".

The prospect has got ex-pats very concerned. In a recent survey, financial advisory firm the deVere Group, found that 68% said they were worried about how they'd be affected if the UK left the EU.

While many people are uneasy about the effect of Brexit on their assets, says chief executive Nigel Green, just as many fear losing their pension rights.

"Will UK pensions continue to be paid, inflation-linked, to those expats living in the EU? he says. "Or will the UK government try to save money?"