'Cliff edge' Brexit would be bad news for pensions

In our latest edition of The Connexion, out this week, we consider how December will be a crucial point in the Brexit negotiations, especially if lack of progress brings renewed fears of a 'cliff edge' Brexit with no deal or transition period. Among those from whom we sought views was Gerard Barron, who has French-British citizenship. Mr Barron, from Boulogne-sur-Mer, qualified as a British solicitor and French avocat and had many years in the law, including helping Britons in France, before he retired recently. He sent in the following personal view, published here in full.

As Jenni Russell wrote in The Times on November 16, many of those electors who voted for Brexit now want “special treatment to soften the pain”. This confirms a feeling many people have, that those who voted to ‘Leave’ had not really thought the matter through.

There is however a special category of Brits, who would, had they been given the chance, have voted overwhelmingly to ‘Remain’: the long-term expats.

While the UK now seems to be debating whether the lemmings should just jump off the cliff or manage to negotiate themselves into sharing a parachute, the long-term expat with no vote and no representation, having come to appreciate all the benefits which flow from EU ‘citizenship’, is now faced with the prospect of the loss of all fundamental freedoms: the right to come and go, to set up or move on and to offer or acquire an unlimited range of goods and services EU-wide.

The other commodity which also comes with an EU guarantee of freedom of movement, is capital. Attention is now being drawn in some media (eg: The Guardian, September 18), to the risk facing expat pensioners that their UK [private] pension providers may no longer be legally able pay their pensions to anywhere outside the UK.

Now one must of course rest assured that the stupendously competent Conservative government, currently failing to get anywhere in its dealings with Brussels, will now turn its attention to that question, so vital to all UK pensioners (present or future) living or intending to live abroad.

Undoubtedly, there will be some sort of last-minute solution and if there isn’t, then of course pensions could probably continue to be paid into a UK bank account from which the expat pensioner could continue to transfer funds to France or elsewhere. However, has anyone reflected on what might happen if the current government is then promptly thanked for its efforts by being kicked out of office in favour of Labour?

Does anyone remember exchange control? Jog your memories: £50 per person per foreign trip? Bank of England control over (and even consent for) large movements of capital, such as to buy a holiday/retirement home?

What Mrs Thatcher abolished could easily be reintroduced by Labour if, as certain commentators believe is perfectly plausible, Brexit were to be followed by the election of a hard-left Labour government, and that could cause a massive run on sterling.

If that were to happen, then whatever deal may have been struck pre-Brexit to ensure pensioners get their due wherever they happen to live, they might find that new exchange control restrictions would make it impossible to get their pensions out of the UK, even if paid into a UK bank account.

However, not to worry: by that time sterling may be worth so little against the euro that the reintroduction of UK exchange control makes little practical difference anyway…

See also: Threat to expats’ private pensions