British expatriates living in Europe “could lose their pensions and have their insurance voided after Brexit”, UK chancellor Philip Hammond has been warned, The Times is reporting today.
According to the London-based newspaper’s website, Nicky Morgan, chairwoman of the Treasury committee, has told Hammond in a letter that UK-based pensions and insurance companies “may be barred from making payments [to] or taking money from EU customers unless the Brexit negotiations address the issue of contracts”.
At present, insurers and pensions companies must be authorised to sell their products to EU customers, pay claims and receive premium payments, with British companies able to do this under the EU’s “freedom of services” rules. This requirement “would create a problem if the Brexit talks do not reach an agreement on how to deal with the issue of business that pre-dates the withdrawal”, the Times article quotes Morgan as warning Hammond.
It goes on to quote Morgan as saying that the situation affecting the pensions and insurance contracts in Europe of UK expats and others living in the EU after Brexit “is a stark example of the consequences of a ‘cliff edge’ Brexit”, and that the Association of British Insurers (ABI) had already raised concerns about the issue.
The problem, the Times points out, is that with the UK currently scheduled to leave the single market after March 2019, passporting rights for UK businesses operating across Europe will end, “leaving legal uncertainty about the treatment of contracts already written”.
As a result, “a British pensioner living in Spain may have pensions payments stopped if providers were blocked from transferring the money”, the Times report notes.
In a statement posted on its website today, the ABI said it was aware of Morgan’s “intervention” on the matter concerning insurance and pension contracts post-Brexit, and welcomed it.
It noted that Morgan had shared with the chancellor an ABI briefing “explaining the background to the issue”, which it noted may be found by clicking here.
To read the story on the Times‘s website, which has a paywall, click here.