The pound ticked on Thursday as GBP investors cheered the Bank of England’s (BoE) new economic forecasts.
Currently if you live in the UK, anywhere in the EU, Iceland, Liechtenstein, Norway or Switzerland, you’ll receive an increase to your state pension each year in line with the triple lock, matching the rise in wage growth, inflation or a set 2.5%, whichever is higher.
Under the terms of the withdrawal agreement agreed between the UK and EU last year, this will continue for anyone who is eligible to receive a UK state pension and is living in one of these countries by the end of 2020.
However, from 2021 onwards it’s uncertain whether anyone moving to one of these countries will be eligible for the yearly increase, with it being dependent on negotiations between the UK and EU on their future relationship.
It’s likely that the UK will only continue the yearly pension increases in countries which have a reciprocal agreement for its own state pensioners living in the UK.
Speaking to the BBC, the Department for Work and Pensions stated:
‘Insisting on reciprocal arrangements has been government policy for over 70 years and will continue to be so.’
The Republic of Ireland, Gibraltar and Switzerland already have pre-existing agreements in place, so UK pensioners living in these countries will continue to benefit from the yearly increase regardless of any deal agreed between the UK and EU.
The UK also has agreements in place with a number of countries outside of Europe, with UK state pensions claimed in countries including the US, Israel and Barbados all rising in line with the triple lock each year.
Things might get a little more complex if you’ve been working in Europe before deciding to retire however.
For instance, you may have spent 20 years working in the UK before moving to France and continuing your career for another 20 years before retiring.
At the moment you would claim your pension in France and then French and British authorities would co-ordinate your claim into a single payment.
This is also set to remain in place until the end of 2020, after which time such co-operation will depend on the future relationship negotiated between the UK and EU.
Save money when transferring your pension
When it comes to transferring your UK state pension to Europe (or anywhere else in the world) it’s important to get the best return possible – and that’s where we come in.
At Currencies Direct we’ll help you avoid the transfer fees charged by most banks, potentially saving you hundreds over the course of the year. We’ll also make sure that your transfers are made at an excellent exchange rate, helping you make additional savings.
With us you can also set up a regular transfer to repeat automatically each month, meaning your pension will arrive in your local bank account without you even lifting a finger.
You’d also have the option to make your currency transfers 24/7 online or through our handy app.
While we can’t be 100% sure how Brexit may affect your UK state pension, by exploring your currency options you can ensure you always get the best value when transferring it aboard.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.