What will happen to the UK’s expat pensioners after Brexit?
Expatra has had a flood of emails from readers wanting to know about retiring across the Channel after Britain leaves the European Union. News on Brexit is coming thick and fast, and changing constantly.
There is a bewildering snowstorm of information and speculation, even when it comes to the government’s own pages.
We are not going to speculate on what may or may not happen; here, you will find only the latest facts and confirmed news, with links to the best resources to find out more – and we’ll be sure to keep you updated.
The government has launched its Get Ready For Brexit site: in it, it says the UK WILL leave the EU on 31 October 2019.
You “may not be able to continue living and using services in the EU if you are not a resident”.Get Ready For Brexit – UK government site
That will have an impact on some 900,000 Britons living in the EU, around a quarter of whom are retired.
The government says that, after Brexit, “your rights will change”. Although protecting the rights of UK nationals in the EU is “a priority”, it says it cannot “fully” do so “unilaterally”.
In an issue brief for the Migration Policy Institute (MPI), researcher Helen McCarthy says leaving the bloc with no deal would raise “serious issues” for UK pensioners in the EU as they transition from being EU citizens to third-country nationals under EU law.
So-called ‘lifestyle retirees’ will be particularly affected, she says, as opposed to ‘in situ retirees’, who worked in their countries of residence before retirement and are therefore “embedded” in national social security systems.
Urgent Europe retirement to-do list
The key things the government says you should do “as soon as possible” if you live in the EU-27 (which means these are also things to investigate immediately if you plan to retire to the EU in the near to medium-term future) are:
- Apply to be a resident in the EU country in which you live
- Register for local healthcare or take out health insurance
- Check if your passport is valid for travel
- Exchange your UK driving licence for a local one
- Get a health certificate for your pet to replace UK pet passports
It has also said it is providing £3 million in extra support to inform UK nationals in the EU and help them with their registrations.
We will provide information and links to these tasks below – as well as more information on the all-important finances – including pensions, currency implications, tax and wills – and details of other issues affecting the Briton retiring overseas, such as pet passports and mobile phone roaming costs.
Finally at the end you’ll find a list of useful links and some country-by-country resources for Spain, France, Portugal, Cyprus, Italy and Malta.
EU residency and registration for UK expats
Brexit could end Britons’ right to free movement within the EU. In the event of a deal there will be a transition period; otherwise grace periods are likely to be shorter and to begin the day after Brexit.
Either way, they will only account for Britons who are legally resident in the EU country in which they live at that time – so it is key to sort out residency.
A number of countries, including France and Spain (with some of the largest populations of UK citizens), have reciprocity clauses in their no-deal contingency legislation – while others have not yet decided on Britons’ long-term status after a grace period.
The government advises looking at its ‘Living In’ country guides and there is further advice below for Spain, Portugal, France, Malta and Cyprus.
As an EU citizen, any UK individual can currently spend three consecutive months in another EU country without becoming legally resident (normally enacted by providing proof of an income or pension and of healthcare provision, such as the S1 certificate issued by the UK government to reimburse other members for the individual’s healthcare costs).
Split time ‘particularly complicated’
The MPI says UK pensioners are “less likely” to register than other age groups, as they tend to only do so when incentivised by the need for ongoing healthcare for long-term conditions.
Younger British retirees, who are not entitled to an S1 certificate if not yet drawing their state pension, are even less likely to feel the need to register.
Pensioners used to splitting their time between the UK and other EU countries will find it “particularly complicated” after Brexit to prove residency, maintain their second homes and access healthcare, the MPI warns, as most countries only consider someone resident if they spend more than six months a year there – yet most also require registration for residency after three or four months.
Those who already have permanent residency (such as in situ retirees) will be better places to apply for any new residency status after Brexit.
Post-Brexit, lifestyle retirees will find it harder to secure residency if the EU applies rules for retirees from outside the bloc, and may need to prove fairly high incomes (€25,560 in Spain) and private medical cover.
Healthcare in Europe for UK expats after Brexit
At the moment British nationals who retire to the EU have their healthcare covered by the NHS under the S1 scheme.
The Department of Health and Social Care estimated in 2017 that it was covering healthcare costs for 109,000 UK pensioners in other EU countries.
But the UK government says that if EU member states do not agree to extend existing healthcare arrangements before exit day, many EU healthcare arrangements for UK citizens would revert to those that apply to the rest of the world – which means neither the S1 scheme nor the European Health Insurance Card (EHIC) could be used.
It has made an offer to all EU countries to continue the current reciprocal healthcare arrangements if there’s a no-deal Brexit until 31 December 2020.
Time to go private?
If you are a permanent or temporary resident, you should review your healthcare cover, it advises, particularly if you have a pre-existing medical condition.
In other words, check if you need private insurance.
If you return to live in the UK and meet the ordinary residence test, you will be able to use NHS services.
If you are living in an EU country on exit day and have an S1 form or EHIC issued by the UK, you may use NHS services in England, Scotland and Wales without charge when visiting the UK.
This will not change after Brexit.
Post-Brexit finances for UK expats in Europe
The Department for Work and Pensions has now warned that British pensioners might lose annual increases to their state pensions if Britain leaves the EU without a deal.
The government guarantees that it will continue paying the annual increases – but only for three years after a no-deal Brexit, it says.
The state pension is currently uprated each year by the higher of either wage growth, inflation or 2.5 percent (the so-called triple lock).
Some half a million British pensioners live in 120 ‘frozen’ countries such as Australia, Canada or New Zealand, with their state pension fixed at the same rate as when they left the UK; the government will be under pressure to uprate in all countries if it does so for the EU.
Personal pensions and annuities
One of the biggest fears of no-deal Brexit within the financial services sector is that UK pension providers paying income to overseas retirees will not be able to do so any longer.
A UK insurance company, for example, paying an annuity to a UK expat in the EU would no longer hold the ‘passporting rights’ to do so.
Providing financial services without passporting rights means risking fines and penalties.
Some UK financial firms plan to set up subsidiaries in the EU to be able to pay money into European bank accounts.
If you are retired in the EU, or in the process of retirement, and have a UK financial services company looking after your pension pots, it makes sense to ask them whether they have their Brexit solutions ready.
The UK government has said it would give temporary permission for financial firms in the European Economic Area to pay people in the UK, so a Spanish pensioner living in the UK, or someone who has worked in Europe but returned to retire in the UK, would not have the same problem in the short-term.
There are, however, big question marks over the protection in place if any of these firms went bust.
HM Treasury simply says that your provider “should have made plans” to make sure you can still get your personal pension or annuity even if the UK leaves the EU without a deal, and “should contact you” if it needs to make any changes to your product or the way it provides it.
Currency and money
Sterling has become considerably weaker since 2016, with the pound falling by 15 per cent against the euro since the Brexit referendum in 2016, based on Bank of England monthly averages.
Its slide has been a blow to the living standards of British expats drawing their income in pounds.
Volatility looks set to continue – although, as it is political uncertainty most affecting GBP, things are likely to settle after Brexit.
The cost of sending or paying in euros may also increase.
It is also worth noting that you will need to declare cash of £10,000 or more (or the equivalent in another currency) if you take it between the UK and any other country.
If there’s no Brexit deal, it may become more expensive to use your UK bank card abroad as a surcharge may apply.
Tax rules for each EU country are “unlikely to change because of Brexit”, says the UK government, “as they are down to each jurisdiction to manage.”
The same goes for any double taxation treaty between the UK and another country, to ensure you are not subject to unnecessary tax in the two jurisdictions.
Mobile phone costs
Remember – after Brexit, the guarantee of free mobile phone roaming throughout the EU, Iceland, Liechtenstein and Norway will end, so check your charges with your phone operator.
You are, however, protected from being charged more than £45 without opting in to spend more.
Inheritance tax and wills
Any valid will made under UK law before Brexit, including wills that apply to property in the EU, will remain valid under UK law.
However, you do need to check your local rules.
“The effect of the will in relation to property abroad continues to be subject to the law of the country in which the property is situated”. So best to check locally, it would seem.Get Ready For Brexit – UK government site
Brexit will not change any existing UK rules for inheritance tax, the government says: it will continue to be levied on transfers of worldwide assets by those domiciled in the UK and transfers of UK assets by non-domiciled people.
Passports and travel for the UK expat in the EU
Passports: Six-month rule
If there’s a no-deal Brexit, you must have at least six months left on an adult or child passport to travel to most countries in Europe (not including Ireland).
If you renewed your current passport before the previous one expired, extra months may have been added to its expiry date.
Any extra months on your passport over 10 years may not count towards the six months needed.
If there is a deal, nothing will change until at least the end of 2020. During this time you can continue to travel freely in the Schengen area with your UK passport.
If there’s no deal, UK nationals will not need visas for short stays of up to 90 days within a 180-day period elsewhere in the EU.
But an odd caveat is that you may need to show your return or onward ticket at border control and show that you have enough money for your stay.
If you hold a residence permit from an EU, European Economic Area (EEA) or European Free Trade Association (EFTA) country, you will be able to transit through other EU, EEA or EFTA countries to reach your country of residence.
Travel to Ireland will not change after Brexit.
Driving in Europe
You will need an international driving permit (IDP) to drive in some countries. Check if you need one on the Post Office website.
You will need a ‘green card’ from your car insurance company for a UK-registered vehicle – allow one month for this. And don’t forget to buy a ‘GB’ sticker, even if you have the GB sign on your numberplate.
If you plan to move a pet to Europe after Brexit, UK pet passports will become invalid in the EU.
The new scheme will take four months to organise through your vet, and will require a health certificate and blood tests.
Resources for UK expats retiring to Europe
- Start here: https://www.gov.uk/get-ready-brexit-check
- European Commission – UK nationals’ residence rights in the EU27: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en
- UK government – Living in the EU – prepare for Brexit: https://www.gov.uk/guidance/advice-for-british-nationals-travelling-and-living-in-europe
- UK government – British nationals overseas: https://www.gov.uk/going-and-being-abroad/british-nationals-overseas
- UK government – Important Brexit information for UK nationals if there’s no deal: https://www.gov.uk/guidance/important-eu-exit-information-for-uk-nationals-if-theres-no-deal
- UK government – passport rules for travel to Europe after Brexit: https://www.gov.uk/guidance/passport-rules-for-travel-to-europe-after-brexit
- NHS – planning your healthcare abroad: https://www.nhs.uk/using-the-nhs/healthcare-abroad/moving-abroad/planning-your-healthcare/
- UK government – visit Europe after Brexit: https://www.gov.uk/visit-europe-brexit
- UK government – benefits and pensions for UK nationals in the EU, EEA or Switzerland if there is a no-deal Brexit: https://www.gov.uk/guidance/uk-nationals-in-the-eu-benefits-and-pensions-in-a-no-deal-scenario
- HM Treasury – banking, insurance and financial services if there is no Brexit deal – information for people living in the EEA: https://www.gov.uk/government/publications/banking-insurance-and-other-financial-services-if-theres-no-brexit-deal/banking-insurance-and-other-financial-services-if-theres-no-brexit-deal-information-for-people-living-in-the-eea
- Financial Conduct Authority – how Brexit could affect you: https://www.fca.org.uk/consumers/how-brexit-could-affect-you
- Sign up for government Brexit alerts: https://www.gov.uk/email-signup?topic=%2Fbrexit
Country-specific resources *
* All English language links
Spain and Brexit
- UK government – living in Spain: https://www.gov.uk/guidance/living-in-spain
- Spanish Moncloa site on Brexit: https://www.lamoncloa.gob.es/lang/en/Paginas/index.aspx
- Spanish Ministry of Labour on Brexit: http://www.mitramiss.gob.es/en/index.htm
- NHS on healthcare in Spain: https://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-spain/
- European Commission – Brexit and Spain: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#spain
France and Brexit
- UK government – living in France: https://www.gov.uk/guidance/living-in-france
- British in Europe’s analysis: https://britishineurope.org/2019/08/05/analysis-of-frances-no-deal-legislation/
- NHS on healthcare in France: https://www.nhs.uk/using-thttps://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-france/
- French government on Brexit for Britons: https://brexit.gouv.fr/sites/brexit/accueil/vous-etes-britannique-en.html
- European Commission – Brexit and France: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#france
Portugal and Brexit
- UK government – living in Portugal: https://www.gov.uk/guidance/living-in-portugal
- NHS on healthcare in Portugal: https://www.nhs.uk/using-thttps://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-portugal-including-madeira/
- Portuguese SEF (Foreigners and Borders Service) on Brexit: https://imigrante.sef.pt/en/brexit/
- European Commission – Brexit and Portugal: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#portugal
Cyprus and Brexit
- UK government – living in Cyprus: https://www.gov.uk/guidance/living-in-cyprus
- NHS on healthcare in Cyprus: https://www.nhs.uk/using-thttps://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-cyprus/
- Cypriot government on Brexit: https://brexit.com.cy/en/
- UK government open letter to Britons in Northern Cyprus: https://www.gov.uk/government/news/open-letter-to-britons-resident-in-the-north-of-cyprus
- European Commission – Brexit and Cyprus: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#cyprus
Italy and Brexit
- UK government – living in Italy: https://www.gov.uk/guidance/living-in-italy
- NHS on healthcare in Italy: https://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-italy/
- Italian government’s plans in case of a no-deal Brexit: https://www.gazzettaufficiale.it/eli/gu/2019/05/24/120/sg/pdf (Italian only) (Section II, Art. 14 – 17)
- European Commission – Brexit and Italy: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#italia
Malta and Brexit
- UK government – living in Malta: https://www.gov.uk/guidance/living-in-malta
- NHS on healthcare in Malta: https://www.nhs.uk/using-the-nhs/healthcare-abroad/healthcare-when-travelling-abroad/healthcare-in-malta/
- Malta government’s plans in case of no-deal Brexit: https://www.gov.mt/en/pages/FACTSHEET-Malta-Government-plans-in-case-of-a-no-deal-Brexit.aspx
- European Commission – Brexit and Malta: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en#malta