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Irish retirees at risk of losing UK pension payments over Brexit

13/08/2018 Posted by IAPF | Comments(0)

Pension payments being made to thousands of people in this country are threatened by Britain’s plans to pull out of the European Union, it has emerged.

The issue is a huge risk to the pension payments of people who worked in the UK and get either a UK state pension, a British private pension or both.

And it is likely to affect people who worked in Northern Ireland but live in the Republic and receive a sterling pension.

Around 120,000 people here are in receipt of a British state pension, having worked in the UK in the past. It is not known how many also get private pensions from Britain. The issue will also affect British people who have retired here.

Brexit could mean that the UK government and the providers of private pensions to people based here will no longer be able to pay them into Irish bank accounts.

The Irish Independent has seen correspondence from one pension provider, advising its Ireland-based pension recipients to open bank accounts in the UK in order to avoid the loss of payments. Pension Insurance Corporation wrote to its members here, stating: “As it stands, insurance providers may not be able to continue paying out to overseas bank accounts after Britain leaves the EU in March 2019.”

The massive insurer, which pays pensions to 150,000 people in Britain and Ireland, said that if a deal on future banking arrangements is not reached by March, it “will need to pay your pension into a UK bank account”.

Fianna Fáil TD John Brassil, who has been contacted by an affected constituent, said the situation had the potential to be a “huge issue”.

The Tipperary TD said: “When older people see a letter like that, saying they mightn’t be able to get their money, they panic.”

Mr Brassil has called on Tánaiste Simon Coveney to ensure that ‘financial passporting’ between the UK and Ireland is dealt with swiftly as part of the ongoing Brexit negotiations.

Noting that pensioners are being told to open a UK bank account, Mr Brassil said: “It would be easier to rob the bank than open an account from here.”

The head of the Irish Association of Pension Funds, Jerry Moriarty, said tens of thousands of people in this country are paid British pensions.

He said: “Under European Union rules, you have a right to have your pension paid into any member state, but no one has a clue how this will work out when Britain leaves the EU.”

Mr Moriarty also noted that it was not possible for Irish people to open a UK bank account without a UK address.

“There isn’t anything practical people can do about this situation at the moment,” said Mr Moriarty, who is also vice-chairman of Pensions Europe.

The Association of British Insurers has warned that the risk of Britain leaving the single market means insurers will lose their licence to provide insurance in the customer’s jurisdiction and therefore cannot legally fulfil their contracts and pay pensions.

“This could mean that cross-border pension payments from the UK into the EU or the EU into the UK cannot be paid. It would also affect the ability to pay claims on many liability insurance contracts offered to businesses on a pan-EU basis.”

Accountant Frank Buckley, who runs USP Financial in Tullamore, Co Offaly, said it was likely that an agreement would be struck to facilitate continued cross-border payments.

Asked why people here could not be paid by cheque, a spokesman for Pension Insurance Corporation said: “We are investigating contingency plans and talking to the appropriate regulators.”

The director of the Banking and Payments Federation Ireland, Maurice Crowley, said that he did not foresee any changes in payments arrangements after Brexit.

He added that Britain was set to stay in the EU’s Single European Payments Area (Sepa) process, which allows for cross-border payments.

 

Read the original article here.

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