View more on these topics

Govt ‘alive’ to Brexit risk for expat pensions

Expat pensions globeThe Government has said it ‘alive’ to the risks Brexit could pose to expat pensions after starting talks with the industry over safeguards.

The chair of the influential Treasury select committee Nicky Morgan wrote to Chancellor Philip Hammond last month sounding a warning over the future of long-term pensions and insurance policies that are currently sold by UK companies throughout the EU, whose passporting rights could be hit by a sharp Brexit.

In her letter, Morgan asked the Government to clarify its position and called on Hammond to raise issues such as insurers paying out on cross-border contracts with EU officials.

She wrote: “The possibility that UK providers may not be legally able to pay out pensions or insurance contracts to citizens in the EU — including UK expats — is a stark example of the consequences of a cliff-edge Brexit.”

Hammond has now replied, saying that “the Government is alive to the risk that the UK’s withdrawal could in some cases create legal uncertainties as to the status of existing cross-border insurance, pension and other financial services contracts sold under passporting arrangements.”

“The Government has been actively engaging with the financial services sector – including the insurance and pensions industry – to understand how the UK’s exit from the EU could impact financial services firms and their customers, including through the effect of withdrawal on existing contractual relationships.”

Hammond reiterates his hope that the Government will negotiate: “a time-limited interim period, to provide certainty and avoid a cliff-edge for business and individuals during the transition from the current structures of membership to the new relationship.”

He adds: “These arrangements should be designed so as to ensure that businesses do not face two sets of changes as we adjust from our current relationship with the EU to the deep and special partnership that we are seeking to secure.”

Industry bodies such as the Association of British Insurers have been vocal on the need for clear rules post-Brexit on cross-border contracts. Unless transitional arrangements are extended, they would not last not enough to safeguard rights for many long-term products.

Recommended

Parliament-UK-Government-Dusk-700.jpg
2

MPs sound Brexit warning over expat pensions

The head of an influential committee of MPs has urged the Government to make sure British expatriates are not left without their pensions as a result of a ‘cliff-edge’ Brexit. Treasury select committee chair Nicky Morgan has written a letter to Chancellor Philip Hammond warning over the future of long-term pensions and insurance policies that […]

2

Brexit: Govt tells City it plans to break with EU regulation

The Government has outlined plans for post Brexit financial services regulation in the UK to ultimately diverge from the European Union. Brexit secretary David Davis met with City leaders last week at Chevening, foreign secretary Boris Johnson’s country residence, the Financial Times reports. Davis told a breakout session for financial services that the UK would lose potential competitive gains […]

26

FCA: Only half of DB transfers rated suitable

DB transfers feel more heat from regulator as only third of product choices found suitable The FCA has released findings of an assessment of defined benefit transfer advice showing just 47 per cent were rated suitable. In an update on its work published this morning, the regulator has revealed the full scope of its work […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I’m slightly unclear – expats with UK policy could have a) bought them while living in the UK and then emigrated or b) bought them while living in the EU under a passporting arrangement.

    If they are living in the EU and have a UK policy, why does it matter how it was sold and where they lived at the time it was bought?

Leave a comment