Brexit frequently asked questions01 February 2020 Back to results
What’s the timing for Brexit?
The UK left the EU on 31 January 2020. Following the passage of the European Union (Withdrawal) Act there will be a transition period during which the UK will be treated as if it’s still in the EU for practical purposes. This will be used to negotiate a future trade agreement and will last until 31 December 2020. It could technically be extended although the UK Government has said it won’t seek to do this.
How has Aegon been planning for Brexit?
We’ve monitored developments closely and have been focusing on the interests of our customers - making sure that our business has been prepared for all Brexit outcomes, including a no-deal Brexit. This included looking at the resilience of our supply chains. We’ll continue to take a close interest in negotiations around a future trade agreement. As a UK business, we’re affected by existing EU laws and regulations relating to financial services. The UK Government and regulators have already said that the UK will continue to follow these existing EU rules until decisions are made at a later date to move away from these. This gives continuity and time to plan for any future changes.
Are there any immediate changes to pension or investment policies?
Pensions and investments tend to be invested in stocks and shares, the value of which can fall as well as rise. Investors may change their views on the value of various stocks and shares as they respond to the impact of the UK’s withdrawal and predict what a future trade agreement might mean for companies both within and outside the UK.
Looking ahead, the value of pensions and investments will continue to be affected by the value of the funds they’re invested in, and can fall as well as rise and there are no guarantees. The value is also likely to depend on broader economic factors, for example interest rates, currency movements and general views on the UK’s outlook. It isn’t possible to predict these in advance. You could get back less than you invest.
Should I change where I’m invested?
If you’re considering changing where you’re invested, we recommend you speak to a financial adviser. We’re unable to provide advice.
Will there be changes to when I can start to take a pension?
Not as a direct result of Brexit. The minimum age at which you can take a pension is set by the UK Government. It's currently age 55.
Will there be changes to the tax relief I get on pension contributions?
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.
Will there be changes to the rules around ISAs?
Not as a direct result of Brexit. ISAs are a UK product and the rules are set by the UK Government.
Is my Aegon policy safe?
The safety of your policy isn’t directly affected by the UK leaving 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.
Will the Aegon group still support you in the UK?
As an important part of the Aegon group our parent company continues to support us in the UK. Our recent acquisitions of Cofunds and the defined contribution pensions of BlackRock show our long term commitment to the UK. Aegon UK is independently strong with a robust balance sheet.
I’m an Aegon UK customer but live in another EU country - will Aegon continue to service my policy?
We have customers who, after taking out a product with us, moved from the UK to the EU. We also have customers who were outside the UK but in the EU when they became customers. We hope to be able to carry on servicing both groups of customers, but this may depend on the approach taken in each EU country. As there is a Brexit deal, there will be no change to servicing until the end of the transition period, so until 31 December 2020 at the earliest. If we do find we're unable to continue to service your policy, we'll set out the options you have to benefit from your policy. We’ll do this after discussions with local regulators.
If I’m a UK citizen living and working in another EU country, will I be able to carry on saving in to my pension there?
Individuals entitled to work in the EU will be able to benefit from the pension rules in the country they’re working in.
How will Brexit affect my UK state pension?
Living and working in the UK
UK state pension benefits are set by the UK Government. Generally speaking, if you’ve always lived and worked in the UK, your state pension shouldn’t be directly affected as a result of Brexit.
Living in the EU before 31 December 2020
If you’re a UK citizen living in the European Economic Area (EAA) or Switzerland on 31 December 2020 and entitled to a UK state pension, the UK Government has promised to continue to increase your state pension each year, for so long as you continue to live there.
If you’re working in the EEA or Switzerland, you’ll also be able to count future social security contributions towards meeting the ‘qualifying conditions’ for your UK state pension.
Moving to the EU after 1 January 2021
If you move to an EEA state or Switzerland after 1 January 2021, then you won’t be covered by the Withdrawal Agreement. This means that your entitlement to receive UK benefits in these countries is not yet decided will depend on the outcome of the UK Government’s negotiations with the EU.
You’ll still be able to receive your UK state pension in the EEA or Switzerland, but other elements of how the state pension will work are still to be confirmed, including:
- Whether you’ll receive automatic increases in your state pension each year.
- Whether any future social security contributions you would make whilst working in an EEA state or Switzerland would count towards topping up your UK state pension. This is known as social security coordination and at the moment means you would only have to claim one state pension. If social security coordination ended, you’d need to make a separate claim for a state pension in the EEA state or Switzerland, as well as in the UK.
- Another impact of stopping social security coordination could mean that you would have to meet a new minimum number of years of contributions before you become entitled to a state pension in the EEA country or Switzerland. As it stands, each year of your social security contributions in the EEA or Switzerland will count as if they were years of entitlement towards your UK state pension. Instead, an end to social security coordination might mean you have to start afresh with no contribution record for social security within a new EEA country or Switzerland, and you'd then need to meet their minimum number of years of contribution before becoming entitled to a state pension in that country.
The exception is for any UK or Irish nationals moving to Ireland from the UK, as in these circumstances the Government has confirmed that state pension increases and social security coordination will continue. You’ll also continue to receive other UK benefits, so long as you remain entitled to them.
Unrelated to Brexit, the UK state pension age for both men and women is increasing to 66 between 2018 and 2020 and to 67 between 2026 and 2028.
If I’m a citizen of another EU country living and working in the UK, will I be able to carry on saving in to my pension in the UK?
Yes, EU citizens living in the UK will be able to carry on contributing to pensions here.
I’m a citizen of another EU country living in the UK. How is my state pension affected?
As the UK has left with a deal, social security coordination will continue to benefit EEA and Swiss citizens who are living in the UK by 31 December 2020. There are two parts to this:
- 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.
- 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.
It will be possible to count any social security contributions made in the EEA or Switzerland towards your UK state pension, assuming these were made before 31 December 2020 and you are covered by the Withdrawal Agreement. After this date, the extent of any further coordination is unknown until the UK and EU finish negotiating to determine the status of their future relationship.
It’s not known whether EU countries will continue to increase the pensions they pay to their citizens living in the UK.
As part of the Brexit negotiations, what happens to rules around pensions / financial services which have been set at EU level?
Many of the rules and regulations currently applicable to financial services in the UK come from EU laws. Some of these applied automatically as a result of our EU membership. In other areas, the EU sets rules which member countries then need to build into domestic laws and regulations.
In either case, the UK Government has confirmed existing EU laws and regulations relating to financial services will continue to apply unless and until they consciously decide to set different UK rules. This will also be the case for any future EU regulation that comes into effect during the transition period.
In some cases, when the UK has implemented EU regulations, the Government has gone further, suggesting it supports these rules, so they may be unlikely to revoke them. In the current phase of negotiations for future trading agreements, it may also be important to demonstrate that the UK financial services industry operates to equivalent relevant standards to those applying in the EU.
As it’s the EU that requires gender neutral annuities and life insurance premiums, will we see this changed?
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.
How can I keep informed of developments?
We’ll regularly update our website to help you keep up to date with developments.