It is becoming increasingly alarming that despite the 38 million British expats who, according the Parliamentary Treasury Committee, live in Europe and are policy holders of UK insurers, many of whom have private pensions that derive from same UK insurers, the negotiations to decide how these pensions can be paid if the current rules do not survive Brexit have not even started with less than a year to go. At present there are arrangements to enable the pensions to be paid from the UK to Europe. Many people are totally reliant on their UK pension and would be placed in financial difficulties if these payments ceased. Unless a deal is brokered, the insurance companies and other financial institutions will be legally barred from such making payments. Many UK financial service providers have lost hope that Mrs. May will be able to obtain a final deal that will include provision for the pension payments.

Giambrone has discovered that across Europe there are approximately 245,000 British citizens aged over 65 living across Europe, as opposed to 62,000 EU nationals aged over 65 living in the UK. Spain is home to the largest British expat pensionable group with France coming second. Many people are becoming anxious about their post-Brexit pension income and the last thing that they want is to see their pension pots laying dormant in the UK because red tape will not allow their pension provider to pay them in Europe. The pension providers see a future of intolerable and costly regulatory hoops to jump through as the nature of the products they provide are long term and their tenure will last for years ahead.

The options for the pension providers to fix the problem are not especially appealing to the insurance sector; they are faced with potentially spending millions on second guessing the outcome and scoping out solutions that may or may not be valid or workable, such as moving to offices in the country in which the business needs to be conducted. The lawyers at Giambrone believe that whilst this would solve the problem no business wants to spend considerable money and time preparing a solution that may not be needed in the end. The idea of two separate sets of rules, one for the UK and one for the EU is very unappealing as that could lead to confusion. The transition period ends in 2020, however there has been so much shifting and sliding of the deadlines that nothing is certain, if that is indeed the year that the transition period ends then time short to negotiate a clear path through this challenge.

Interestingly the difficulty does not apply the other way round as EU pensioners living in the UK have been given assurances by the UK Government that their pensions will be able to be paid as normal as payments from EU pension providers and insurers will not be blocked. The insurance sector has a very compelling reason to find a way to resolve their customers dilemma as if they do not they could find themselves being challenged in the courts for breach of contract; that would be a situation that could lead to the collapse of businesses which would be a detriment to the whole UK insurance sector at a time when the UK financial services sector needs all the help it can get.

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