A growing number of EU countries granting grace periods to British expats after Brexit

A growing number of EU countries granting grace periods to British expats after Brexit

But British expats are not sure whether countries in the EU have the authority to do that!

A notion further strengthened by the fact that Switzerland, Scandinavia, along with 27 other countries are trying to identify the best way to handle their British expats.

With the United Kingdom marching forward to a no-deal Brexit, more and more European countries are reassuring Brits of regular life, even if the offer on the table lasts only for a couple of months.
The catch is most of the countries, from Portugal to Poland, have made this arrangement to be contingent on Britain’s reciprocity of similar terms for their citizens.

Spain is a foremost example of such an arrangement with its authorities extending the same rights to Brits after Brexit provided the UK extends Spaniards residing in the UK the right to residency.

It is critical to note that this move follows the European Commission’s decision to ask its member countries to provide provisional residency permits to British expats, granting them sufficient time to complete the paperwork for long-term residency. Some member states, including Germany and Italy, have already indicated the same to the British nationals residing in the country at the end of 2018.

The critical question is about the nature of EU residence rights British nationals will receive post-Brexit, which will make them third-party nationals in case of a no-deal.

To understand it better, let’s assume that you are an American living in the Netherlands, and you receive exclusive rights as per the Dutch American Friendship Treaty. However, if the UK exits the EU without a deal, it’d leave British Nationals bewildered as they’d neither have citizenship status in the EU nor an immigration status after Brexit. The scenario becomes even trickier in countries like Spain and France, where the British nationals don’t have to register as permanent residents. Brits will have no choice but to stay in their host country until they receive long-term residency status. Even after receiving this status, they would only be able to return as tourists.

In the event of a no-deal Brexit, there will not be any transition period to put new treaties in place.
It is critical to understand that the UK leaving the European Union without a deal will not be the end of the line. The next phase is likely to witness intense negotiations aimed towards repairing the damages caused by Brexit.

The problematic part for British expats living across the EU will be that while they’ll be able to live in their present country, they’ll not have the right to travel or move across the Schengen Area as before. This will only happen if the UK establishes individual agreements for long-term residency with different states.

The best course of action for British expats living across the EU is to apply for a permanent, or at least long-term, residence permit at the earliest. These permits are likely to get harder to come by, leaving Brits stranded or making it challenging to return to their current country in case they decide to visit the UK during these obscure times.

Looming Brexit Forces Canada Life to Stop Selling Annuities to Expats in the EU

Looming Brexit Forces Canada Life to Stop Selling Annuities to Expats in the EU

Canada Life admits unawareness regarding any insurance provider offering annuities to non-residents

The aftermath of Brexit is likely to have a significant impact on financial service providers like Canada Life. The Canadian insurance firm has stopped the sale of its annuities to British expats in the EU.

According to the insurer, the step was taken prior to the original Brexit date (31 March 2019).

Canada Life is citing European Insurance and Occupational Pensions Authority (Eiopa) guidelines as the primary reason behind this move.

As per the Eiopa guidelines, insurance companies would require individual licenses from member states to continue operations in the respective countries post-Brexit.

Canada Life will continue selling annuities in other markets except for the EU. It is important to note that most of Canada Life’s competitors are following a similar trend of limiting their offerings for non-residents.

The Eiopa guidelines state that these rules do not affect the existing arrangements with non-residents, allowing companies to continue working with current clients.

As per the latest company records, Canada Life has over 10,000 existing annuity customers abroad.
For customers residing in the UK with an annuity from the insurer, Canada Life will continue disbursing the monthly payments to any UK nominated bank account. It will give its existing customers the freedom to move anywhere they please.

On the contrary, British expats residing in the EU will no longer be able to buy an annuity in their home country.

There is very little awareness about any insurance provider selling annuities to non-residents at the moment.

Brexit Deal Failure could see UK pension deficits soar by a third

News over a Brexit deal or no deal has been dominating headlines for quite some time and has been spreading worry and concerns for many UK expats who have decided to expatriate themselves overseas for a better lifestyle or retirement.

Understand how this can affect your UK pension can be difficult to understand. UK defined pension schemes have been suffering from severely large deficits since interest rates have remained at records lows for a considerable amount of time. Low interest rates decrease bond yields which in turn increases deficits for UK defined benefit pension schemes. The FT have stated on the 11th December 2018 that deficits could increase by £219bn should we see a hard Brexit.

What does that mean for retirees with UK pensions?

Firstly, an increasing deficit for UK pension schemes means their liabilities increase. This has led to the bankruptcy for many large companies such as Carillion, BHS, British Steel and more. Should the company you hold your pension with go into liquidation, your pension will enter the “Pension Protection Fund”. You will lose percentage of your pension income immediately and in most cases the guaranteed increases will fall or be lost as well. Fortunately, this can be avoided which has been one of the reasons pension members have transferred away from these schemes over recent years.

Furthermore, members have also been enticed to transfer away from their defined benefit schemes over the past few years due to the significant increase in transfer values. Some members have received up to 40 or 50 times their defined income as a cash equivalent transfer value to transfer away. Although this can be very attractive for many member, for other members it may not.

Can I transfer away from my UK Pension Scheme?

If you have a UK pension and now live overseas, you have still options to transfer your pension away. In fact, you have potentially more beneficial options than a UK resident, although under regulation you need to receive FCA regulated advice in order to transfer away if your defined benefit scheme is valued at over £30,000. Based on recent statistics from the FT on the 13th December 2018, out of 48,248 clients who received advice on their defined benefit transfer since 2015, 24,919 members were recommended to transfer.

How do I get advice about my pension?

SJB Global remain at the forefront of the defined benefit transfer market for UK non-residents and can help you understand whether it is in your interest to transfer away from your defined benefit pension scheme or not.