No-deal Brexit: British pensions to be uprated until 2022 if UK crashes out of EU
The British government announced on Tuesday that state pensions for pensioners living in the EU will be uprated each year until 2022 if the UK crashes out of the EU on October 31st without a deal.
Previously the government had announced that pensions would be uprated just for 2019/2020 if there is no deal, but with a no-deal Brexit having grown increasingly likely in recent weeks, the government has extended the guarantee for each year until 2022.
That means pensions will be uprated until the end of the 2022 tax year which is in March 2023.
Uprating essentially means an increase in the value of a state pension based on the ‘triple lock’ mechanism, and guarantees that the basic state pension will rise by a minimum of either 2.5 percent, the rate of inflation or average earnings growth, whichever is largest.
While pensions have been uprated for British pensioners living in the EU they are not for others living in certain countries like Canada or Australia.
The new three-year, no-deal guarantee is to give the UK government the time to negotiate either EU-wide or bilateral agreements with member states in order for uprating to be continued.
There are nearly half a million British pensioners living throughout the EU. The government says pensioners will soon receive text messages alerting them to the new guarantee.
Work and pensions secretary Amber Rudd, once a vocal critic of a no-deal Brexit said: "We will be fully ready for Brexit and are leaving in a way that protects the interests of citizens here and in EU member states".
If the UK manages to secure a deal with the EU in the next few weeks, the Withdrawal Agreement guarantees that uprating will continue for life for those British pensioners already living in the EU.