UK extends no-deal state pension uprating to 2022

The UK government made the announcement last night as an update to previous advice that uprating was only guaranteed for the UK financial year 2019-2020. The former decision had been based on the original Brexit date of March 29, 2019.

Uprating refers to the annual increase in the amount of the state pension according to a ‘triple lock’ mechanism – whichever is highest of increases in average wage, inflation or 2.5%.

When a British state pensioner moves to live abroad their pension is frozen at its amount when they leave unless they are moving within the EU (where uprating must be applied under EU free movement and social security coordination rules) or otherwise to a country with which the UK has a bilateral social security agreement in place including uprating of pensions.

This leads to unequal situations such as pensions being uprated in the USA but not Canada, in Turkey but not Syria, in the Philippines but not Indonesia – however any Briton moving to countries where the pension is not uprated would normally have budgeted for this, whereas Brexit creates uncertainty for British pensioners who have moved abroad in the EU in good faith making use of free movement rights as EU citizens.

Although the UK has not explicitly stated this in its latest update bulletins – and Connexion is seeking confirmation – the previous limit to the year 2019-2020 was on the understanding that the UK would in the case of a no-deal Brexit seek a reciprocal agreement with the EU and/or individual countries over continuation after that.

We understand this to still be the case and can see no reason why a bilateral agreement could not be reached on this with France as the French do not freeze the pensions of their pensioners living abroad so there is unlikely to be any obstacle to agreeing reciprocity.

In the case of Brexit with the negotiated deal, uprating would be guaranteed for life.