Brexit update

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The United Kingdom (UK) will leave the European Union (EU) on 29 March 2019. The UK and EU are currently negotiating the terms of their future relationship. 

These FAQs are based on our understanding of current legislation and UK Government plans, which may change.

Tax relief is set by the UK Government and there’s been no suggestion that the UK Government will change this as a direct result of our leaving the EU.  But granting tax relief when pension contributions are paid means the Chancellor collects less income tax now. Pension tax relief could be reviewed depending on the UK’s economic performance in future.

The Scottish Government’s plans for a second independence referendum are currently on hold. They may revisit these in future depending on the outcome of the Brexit negotiations.

The European Court of Justice passed the ‘gender ruling’ which requires all services, not just financial services, to be offered on terms which are gender neutral. This is broadly accepted as a very welcome measure. As with all EU legislation and regulation, the starting point will be for the UK to continue to follow existing rules. The UK Government would have the right to remove gender neutral rules for life insurance and annuities in future, but we believe this is unlikely because of the broad support for equalities legislation.

The UK Government has already announced that it’s planning to continue increasing   UK state pensions paid to UK pensioners living in the EU.

In addition, the UK and the EU have provisionally agreed that social security co-ordination will continue to benefit people who have already moved to the EU from the UK or who move there before 31 December 2020. There are two parts to this.

  1. Periods when you’ve lived in a country or contributed towards the state pension there for more than a year can count towards your pension, even where you’d normally have to live there or contribute for longer than that to qualify for a state pension in that country.
  2. The second benefit is that states will work together to pay benefits earned in different counties, which means that you normally only need to make one claim. 

This is provisional and depends on agreement of the overall Brexit deal.

There are rules around building up private pensions in other EU countries and the terms for transferring between countries. The ongoing negotiations will include considerations around rights for UK citizens working in another EU country.

The UK and the EU have provisionally agreed that social security co-ordination will continue to benefit people who have already moved to the UK from the EU or who move there before 31 December 2020.  

There are two parts to this.

  1. Periods when you’ve lived in a country or contributed towards the state pension there for more than a year can count towards your pension, even where you’d normally have to live there or contribute for longer than that to qualify for a state pension in that country.
  2. The second benefit is that states will work together to pay benefits earned in different counties, which means that you normally only need to make one claim. 

This agreement is provisional and depends on agreement of the overall Brexit deal.

There are rules around building up private pensions in other EU countries and the terms for transferring between countries. The ongoing negotiations will include considerations around rights for EU citizens working in the UK.

We have nearly 14,000 customers who, after taking out a policy, moved from the UK to the EU and we expect to be able to carry on servicing these customers.

A report has recently been published on parliament.uk which you can read here Brexit - implications for private pensions(Opens new window).

The safety of your policy isn’t directly affected by the decision to leave the EU. Aegon UK is a financially strong company with a robust balance sheet and also benefits from being part of the worldwide Aegon Group.

All references to taxation are based on our understanding of current taxation law and practice in the United Kingdom, which may change.

The tax treatment depends on the individual circumstances of each client and may be subject to change in future. The value of any tax relief depends on your individual circumstances or the individual circumstances of the investor.