Pension Funds In Rush To ‘Get Brexit Ready’ For UK Pensioner Payments Into EU

• There has been a significant rise in enquiries over local currency payments from pension funds ahead of the EU transition deadline
• Funds encouraged to organise their cross-border currency payment capabilities ahead of December 31
• The spike in interest comes as high street UK banks warn expat savers of account closures

November saw a surge in pension funds seeking advice on how to pay UK pensioners residing in the EU, according to international technology-led services and payments specialist EQ (Equiniti Group plc). This comes as UK-EU trade talks near an end.

With the transition period for the UK to leave the EU coming to an end, those UK pensioners who have retired abroad face a range of inconveniences after 31^st December 2020. Some of the UK’s largest current account and credit card providers, including Lloyds and Barclays, have announced they will be closing some EU residents’  UK accounts when the period ends. This leaves pensioners who receive their payments in Sterling having to find alternative arrangements to receive their payments, and pension schemes therefore looking for ways to assist their pensioners.

EQ, which supports around nine million pension scheme members – and manages the payments of over 60,000 UK  overseas pensioners every month – has reported a marked increase in enquiries about overcoming the logistical burden of paying scheme members in their local currency.

In positive news for retired UK pensioners in the EU, Sterling has risen slightly against the Euro since the COVID-19 pandemic, leaving pensioners living on fixed incomes with slightly improved budgets. Since the beginning of the lockdown in 2020, on March 23^rd, Sterling has risen 2.9% against the Euro.

The UK Government has been encouraging businesses to ‘Get Brexit Ready’ in a series of campaigns, the most recent having been launched in July 2020.¹

Duncan Watson, CEO of EQ’s pension business EQ Paymaster, commented: “People could find their dream retirement abroad rudely interrupted, if their pension funds are unprepared for the requisite cross-border currency payments before the Brexit deadline.”

He continued: “It is possible to implement international payment systems for any client who requests it with enough notice, with the fee charged to either the provider or recipient at the discretion of the fund. It simply needs to be implemented with some notice, so we would encourage any pension fund which is unsure of their preparation to get in contact as soon as they can.”

ENDS