Pension income from UK schemes may not generate “sufficient income” for some EU countries and this could impact residence visas according to new analysis. Britons who wish to take up residence in an EU country must now demonstrate that they, and their dependents, have sufficient income and not be a “burden on the state”.
What constitutes sufficient income will vary from one country to another, making retirement planning difficult for many.
Jason Porter, a director of specialist expat financial advice firm Blevins Franks and head of its new European Emigration Advisory Service, broke down how these new parameters will impact UK citizens.
He said: “This raises a problem for many expats who have invested in EU-compliant, tax-efficient investment products.
“Many have placed their financial assets in life insurance bonds or UK pension schemes and intend to utilise the flexible and often tax-efficient withdrawal facilities associated with such structures.
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Jason concluded by detailing expats will not be granted a residence visa unless they can demonstrate this income stream.
They will also need to be in receipt of a visa before they can spend more than 90 days in an EU country.
According to the DWP, current UK law allows for workplace pensions to be paid overseas and the Government did not expect this to change because the UK has left the EU.
The DWP notes that if a retiree has any questions on this, they should contact pension providers directly.
If a workplace scheme is paid into a UK bank account, the bank should contact the person involved if they need to change the way they receive the pension as a result of the UK leaving the EU.
The Government has also confirmed a person can carry on receiving a UK state pension if they move to live in the EU, EEA or Switzerland and you can still claim their state pension from these countries.
The state pension payments will still be increased each year in the EU in line with the rates paid in the UK.
Additionally, retirees will also be able to count relevant social security contributions made in EU countries to meet the qualifying conditions for a UK state pension.
It’s also possible to have pensions and benefits paid by an EU, EEA country or Switzerland and if this is the case, retirees will need to check the rules in the country they are living in or moving to with that country’s social security authority.
Pension providers themselves should make plans to ensure retirees can still get payments from an annuity or personal pension following the UK leaving the EU.
Where changes are needed, providers should contact the retirees involved to keep them informed.
Where people are unsure of their entitlement, they can head to the Financial Conduct Authority’s (FCA) website where the regulator has published information on what pension providers need to do because the UK has left the EU.